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A Look At Virgin Money UK's (LON:VMUK) Share Price Returns

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Virgin Money UK PLC (LON:VMUK) shareholders will doubtless be very grateful to see the share price up 48% in the last quarter. But that doesn't help the fact that the three year return is less impressive. After all, the share price is down 37% in the last three years, significantly under-performing the market.

See our latest analysis for Virgin Money UK

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

Virgin Money UK has made a profit in the past. On the other hand, it reported a trailing twelve months loss, suggesting it isn't reliably profitable. Other metrics may better explain the share price move.

Revenue is actually up 7.0% over the three years, so the share price drop doesn't seem to hinge on revenue, either. It's probably worth investigating Virgin Money UK further; while we may be missing something on this analysis, there might also be an opportunity.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
earnings-and-revenue-growth

It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

It's nice to see that Virgin Money UK shareholders have received a total shareholder return of 14% over the last year. There's no doubt those recent returns are much better than the TSR loss of 0.3% per year over five years. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand Virgin Money UK better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Virgin Money UK you should know about.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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