Pearl Global Industries (NSE: PGIL) Loses 12% This Week, As Yearly Returns More In Line With Profit Growth

Pearl Global Industries Limited (NSE: PGIL) Shareholders saw the share price drop 15% during the month. On the other hand, the return over three years has been impressive. Indeed, the share price rose a very strong 139% during this period. For some, the recent pullback in stock prices wouldn’t be surprising after such a strong run. The thing to consider is whether the underlying business is doing well enough to support the current price.

Given that long-term performance has been good but there has been a recent decline of 12%, let’s check if the fundamentals match the stock price.

Check out our latest review for Pearl Global Industries

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are overly responsive dynamic systems and investors are not always rational. An imperfect but simple way to examine how a company’s market perception has changed is to compare the evolution of earnings per share (EPS) with the movement of the share price.

Pearl Global Industries has become profitable over the past three years. Given the importance of this milestone, it’s no surprise that the share price has risen sharply.

You can see below how the EPS has evolved over time (see the exact values ​​by clicking on the image).

NSEI: PGIL Growth in earnings per share on December 21, 2021

Dive deeper into Pearl Global Industries’ key metrics by viewing this interactive Pearl Global Industries Earnings, Revenue and Cash Flow chart.

What about the Total Shareholder Return (TSR)?

Investors should note that there is a difference between the Total Shareholder Return (TSR) of Pearl Global Industries and the change in its share price, which we have covered above. Arguably, TSR is a more comprehensive return calculation because it takes into account the value of dividends (as if they were reinvested), as well as the hypothetical value of any discounted capital that has been offered to shareholders. The dividends have been really beneficial to the shareholders of Pearl Global Industries, and this cash payout has helped explain why its TSR of 144%, over the past 3 years, is better than the share price return.

A different perspective

We are pleased to report that Pearl Global Industries shareholders received a total shareholder return of 64% over one year. This gain is better than the annual TSR over five years which is 20%. Therefore, it seems that sentiment around the company has been positive lately. Someone with a bullish outlook might take the recent improvement in TSR as indicating that the business itself is improving over time. I find it very interesting to look at the stock price over the long term as an indicator of company performance. But to really understand better, we have to take other information into account as well. To this end, you should inquire about the 5 warning signs we spotted some with Pearl Global Industries (including 2 that make us uncomfortable).

Sure Pearl Global Industries May Not Be The Best Stock To Buy. So you might want to see this free collection of growth stocks.

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

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.