Johnson Outdoors (NASDAQ:JOUT) earnings and shareholder returns have trended down over the past year, but the stock is up 8.6% over the past week

Investors can get closer to the average market return by buying an index fund. Buying individual stocks allows you to achieve greater profits, but you also run the risk of underperformance. investors Johnson Outdoors Inc. (NASDAQ:JOUT) tasted that bitter downside over the past year, when the stock price fell 48%. That’s well below the market’s 11% decline. At least the damage isn’t that bad when you look at the past three years, as the stock has fallen 17% over that time. What’s more, it’s down 22% in about a quarter. That’s not fun for holders. This could be related to recent financial results – you can catch up on the latest data by reading our corporate report.

Although last week has been more reassuring for shareholders, they are still in the red over the last year. Let’s see if the underlying business is to blame for the decline.

Check out our latest analysis for Johnson Outdoors

While markets are a powerful pricing mechanism, stock prices reflect investor sentiment and not just underlying business performance. An imperfect but simple way to study how a company’s market perception has changed is to compare the change in earnings per share (EPS) to stock price movement.

Unfortunately, Johnson Outdoors reported a 26% drop in EPS for the past year. The 48% stock price decline is actually more than the EPS decline. This suggests that the drop in earnings per share has made some shareholders more nervous about the deal. The P/E ratio of 11.64 also points to the negative market sentiment.

Below you can see how the EPS has changed over time (discover the exact values ​​by clicking on the image).

Earnings per share growth
NasdaqGS:JOUT Earnings Per Share Growth, Jun 1, 2022

Before buying or selling any stock, we always recommend a close study of its historical growth trends, which are available here.

A different perspective

While the broader market fell about 11% over the 12 months, Johnson Outdoors shareholders fared even worse, losing 47% (even including dividends). However, it could simply be that the stock price has been affected by broader market swings. It might be worth keeping an eye on the fundamentals should a good opportunity present itself. Long-term investors wouldn’t be so upset, since they would have earned 8% each year for five years. If fundamentals continue to point to long-term sustainable growth, the current sell-off could be an opportunity worth considering. While it’s worth considering the various effects that market conditions can have on the stock price, there are other factors that are even more important. For example, we have identified 4 warning signs for Johnson Outdoors (1 is significant) that you should be aware of.

If you’d prefer to look at another company — one with potentially superior financials — then don’t miss it free List of companies that have proven they can increase profits.

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

This Simply Wall St article is of a general nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your goals or financial situation. Our goal is to offer you long-term focused analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.

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