Qudian Inc. (NYSE:QD) shareholders might be concerned after seeing the share price drop 14% in the last week. But that doesn't change the reality that over twelve months the stock has done really well. After all, the share price is up a market-beating 27% in that time.
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 imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Qudian was able to grow EPS by 33% in the last twelve months. This EPS growth is significantly higher than the 27% increase in the share price. So it seems like the market has cooled on Qudian, despite the growth. Interesting. The caution is also evident in the lowish P/E ratio of 4.59.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
It is of course excellent to see how Qudian 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
Qudian shareholders should be happy with the total gain of 27% over the last twelve months. The more recent returns haven't been as impressive as the longer term returns, coming in at just 3.9%. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). You could get a better understanding of Qudian's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
We will like Qudian 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.
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