Investing in stocks inevitably means buying into some companies that perform poorly. But the long term shareholders of Cardtronics plc (NASDAQ:CATM) have had an unfortunate run in the last three years. Regrettably, they have had to cope with a 55% drop in the share price over that period. And the ride hasn't got any smoother in recent times over the last year, with the price 40% lower in that time. Furthermore, it's down 52% in about a quarter. That's not much fun for holders. But this could be related to the weak market, which is down 24% in the same period.
View our latest analysis for Cardtronics
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.
Cardtronics saw its EPS decline at a compound rate of 18% per year, over the last three years. This reduction in EPS is slower than the 23% annual reduction in the share price. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
We know that Cardtronics has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.
A Different Perspective
We regret to report that Cardtronics shareholders are down 40% for the year. Unfortunately, that's worse than the broader market decline of 11%. 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 11% over the last half decade. 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. It's always interesting to track share price performance over the longer term. But to understand Cardtronics better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Cardtronics (including 1 which is is a bit concerning) .
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
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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