Guild Holdings Company (NYSE:GHLD) shareholders should be happy to see the share price up 26% in the last month. But that doesn't change the fact that the returns over the last year have trailed the market. Indeed, shareholders received returns of 20% whereas the market is down , returning (-20%) over the last year.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During the unfortunate twelve months during which the Guild Holdings share price fell, it actually saw its earnings per share (EPS) improve by 20%. It's quite possible that growth expectations may have been unreasonable in the past.
It's fair to say that the share price does not seem to be reflecting the EPS growth. But we might find some different metrics explain the share price movements better.
In contrast, the 19% drop in revenue is a real concern. If the market sees the weak revenue as jeopardising EPS, that could explain the lower share price.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
We know that Guild Holdings has improved its bottom line lately, but what does the future have in store? So we recommend checking out this free report showing consensus forecasts
A Different Perspective
Guild Holdings shareholders are down 20% for the year, even worse than the market loss of 17%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. It's great to see a nice little 12% rebound in the last three months. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. It's always interesting to track share price performance over the longer term. But to understand Guild Holdings better, we need to consider many other factors. For instance, we've identified 1 warning sign for Guild Holdings that you should be aware of.
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 US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an 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 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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