American Realty Investors (NYSE:ARL) pulls back 10% this week, but still delivers shareholders 4.1% CAGR over 3 years

American Realty Investors, Inc. (NYSE:ARL) shareholders might be concerned after seeing the share price drop 25% in the last quarter. In contrast the stock is up over the last three years. However, it's unlikely many shareholders are elated with the share price gain of 13% over that time, given the rising market.

Although American Realty Investors has shed US$25m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

Check out our latest analysis for American Realty Investors

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During three years of share price growth, American Realty Investors moved from a loss to profitability. That would generally be considered a positive, so we'd expect the share price to be up.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

Dive deeper into American Realty Investors' key metrics by checking this interactive graph of American Realty Investors's earnings, revenue and cash flow.

A Different Perspective

American Realty Investors provided a TSR of 8.3% over the last twelve months. But that was short of the market average. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 2% endured over half a decade. So this might be a sign the business has turned its fortunes around. It's always interesting to track share price performance over the longer term. But to understand American Realty Investors better, we need to consider many other factors. For instance, we've identified 2 warning signs for American Realty Investors that you should be aware of.

Of course American Realty Investors may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.