Zumiez's (NASDAQ:ZUMZ one-year decrease in earnings delivers investors with a 52% loss

The nature of investing is that you win some, and you lose some. And there's no doubt that Zumiez Inc. (NASDAQ:ZUMZ) stock has had a really bad year. In that relatively short period, the share price has plunged 52%. On the other hand, the stock is actually up 20% over three years. More recently, the share price has dropped a further 20% in a month. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.

After losing 12% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

Check out our latest analysis for Zumiez

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).

Unfortunately Zumiez reported an EPS drop of 78% for the last year. The share price fall of 52% isn't as bad as the reduction in earnings per share. It may have been that the weak EPS was not as bad as some had feared.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

A Different Perspective

While the broader market lost about 10% in the twelve months, Zumiez shareholders did even worse, losing 52%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 3% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Zumiez is showing 2 warning signs in our investment analysis , and 1 of those is a bit concerning...

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 American exchanges.

What are the risks and opportunities for Zumiez?

NasdaqGS:ZUMZ

Zumiez

Zumiez Inc., together with its subsidiaries, operates as a specialty retailer of apparel, footwear, accessories, and hardgoods for young men and women.Show more

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Rewards

• Trading at 42% below our estimate of its fair value

• Earnings are forecast to grow 26.74% per year

Risks

• High level of non-cash earnings

• Profit margins (2.2%) are lower than last year (10.1%)

View all Risks and Rewards

Share Price

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1Y Return

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Zumiez

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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.