Stock Analysis

Is Hibbett Sports' (NASDAQ:HIBB) 152% Share Price Increase Well Justified?

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NasdaqGS:HIBB
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Unfortunately, investing is risky - companies can and do go bankrupt. But if you pick the right stock, you can make a lot more than 100%. For example, the Hibbett Sports, Inc. (NASDAQ:HIBB) share price had more than doubled in just one year - up 152%. On top of that, the share price is up 59% in about a quarter. And shareholders have also done well over the long term, with an increase of 146% in the last three years.

Check out our latest analysis for Hibbett Sports

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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 the last year Hibbett Sports grew its earnings per share, moving from a loss to a profit.

When a company is just on the edge of profitability it can be well worth considering other metrics in order to more precisely gauge growth (and therefore understand share price movements).

However the year on year revenue growth of 15% would help. Many businesses do go through a phase where they have to forgo some profits to drive business development, and sometimes its for the best.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
NasdaqGS:HIBB Earnings and Revenue Growth February 8th 2021

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. You can see what analysts are predicting for Hibbett Sports in this interactive graph of future profit estimates.

A Different Perspective

We're pleased to report that Hibbett Sports shareholders have received a total shareholder return of 152% over one year. That gain is better than the annual TSR over five years, which is 14%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Hibbett Sports better, we need to consider many other factors. Take risks, for example - Hibbett Sports has 3 warning signs (and 1 which is significant) we think you should know about.

Hibbett Sports is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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

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