Perficient’s (NASDAQ:PRFT) earnings growth rate below 32% CAGR provided to shareholders

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Not the best quarter since Perficient, Inc. (NASDAQ: PRFT) shareholders, as the stock price fell 29% during this period. But over five years, the returns have been remarkably high. To be precise, the share price is 305% higher than it was five years ago, a great performance by any measure. It could therefore be that some shareholders take profits after good performance. But the real question is whether the company’s fundamentals can improve over the long term. Unfortunately, not all shareholders will have held onto it for the long term, so spare a thought for those caught up in the 40% decline over the past twelve months.

In light of the stock’s 9.0% drop over the past week, we want to look at the longer-term story and see if fundamentals have been driving the company’s positive five-year performance. .

To quote Buffett, “Ships will circumnavigate the globe, but the Flat Earth Society will prosper. There will continue to be wide gaps between price and value in the market…’ One way to examine how market sentiment has changed over time is to look at the interaction between the price of the share of a company and its earnings per share (EPS).

In five years of share price growth, Perficient has achieved compound earnings per share (EPS) growth of 39% per year. This EPS growth is greater than the average annual share price increase of 32%. One could therefore conclude that the broader market has become more cautious towards the stock.

You can see how EPS has changed over time in the image below (click on the graph to see the exact values).

NasdaqGS: Growth in earnings per share PRFT September 5, 2022

It’s probably worth noting that we’ve seen significant insider buying over the past quarter, which we view as a positive. That said, we believe earnings and revenue growth trends are even more important factors to consider. Dive deeper into revenue with this interactive chart from Perficient’s profit, turnover and cash flow.

A different perspective

We regret to report that Perficient shareholders are down 40% for the year. Unfortunately, this is worse than the general market decline of 18%. That said, it is inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer-term investors wouldn’t be so upset, as they would have gained 32%, every year, over five years. If fundamentals continue to point to sustainable long-term growth, the current sell-off could be an opportunity to consider. I find it very interesting to look at stock price over the long term as a proxy for company performance. But to really get insight, we also need to consider other information. Example: we have identified 3 warning signs for Perficient you should be aware.

If you like buying stocks alongside management then you might love this free list of companies. (Hint: insiders bought them).

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

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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