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While Verint Systems Inc. (NASDAQ:VRNT) shareholders are probably generally happy, the stock hasn’t had particularly good run recently, with the share price falling 14% in the last quarter. But over three years, the returns would have left most investors smiling To wit, the share price did better than an index fund, climbing 61% during that period.
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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).
Verint Systems was able to grow its EPS at 381% per year over three years, sending the share price higher. This EPS growth is higher than the 17% average annual increase in the share price. Therefore, it seems the market has moderated its expectations for growth, somewhat. Having said that, the market is still optimistic, given the P/E ratio of 50.76.
It is of course excellent to see how Verint Systems has grown profits over the years, but the future is more important for shareholders. You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
It’s nice to see that Verint Systems shareholders have received a total shareholder return of 16% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 2.5% per year), it would seem that the stock’s performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Before spending more time on Verint Systems it might be wise to click here to see if insiders have been buying or selling shares.
We will like Verint Systems better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.