When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right stock, you can make a lot more than 100%. For example, the Realogy Holdings Corp. (NYSE:RLGY) share price had more than doubled in just one year – up 170%. It’s also good to see the share price up 36% over the last quarter. Unfortunately the longer term returns are not so good, with the stock falling 27% in the last three years.
See our latest analysis for Realogy Holdings
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Realogy Holdings went from making a loss to reporting a profit, in the last year.
We think the growth looks very prospective, so we’re not surprised the market liked it too. Generally speaking the profitability inflection point is a great time to research a company closely, lest you miss an opportunity to profit.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
NYSE:RLGY Earnings Per Share Growth June 2nd 2021
We know that Realogy Holdings has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Realogy Holdings will grow revenue in the future.
A Different Perspective
We’re pleased to report that Realogy Holdings shareholders have received a total shareholder return of 170% over one year. Notably the five-year annualised TSR loss of 7% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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. Take risks, for example – Realogy Holdings has 4 warning signs (and 1 which is potentially serious) we think you should know about.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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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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. 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.
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