This week we saw the Open Lending Corporation (NASDAQ:LPRO) share price climb by 11%. But that doesn’t change the fact that the returns over the last year have been stomach churning. Indeed, the share price is down a whopping 74% in the last year. Arguably, the recent bounce is to be expected after such a bad drop. The real question is whether the company can turn around its fortunes.
On a more encouraging note the company has added US$143m to its market cap in just the last 7 days, so let’s see if we can determine what’s driven the one-year loss for shareholders.
View our latest analysis for Open Lending
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.
Open Lending managed to increase earnings per share from a loss to a profit, over the last 12 months.
Earnings per share growth rates aren’t particularly useful for comparing with the share price, when a company has moved from loss to profit. But we may find different metrics more enlightening.
Open Lending managed to grow revenue over the last year, which is usually a real positive. Since we can’t easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
It’s probably worth noting that the CEO is paid less than the median at similar sized companies. It’s always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
Open Lending shareholders are down 74% for the year, falling short of the market return. The market shed around 17%, no doubt weighing on the stock price. Investors are up over three years, booking 4% per year, much better than the more recent returns. Sometimes when a good quality long term winner has a weak period, it’s turns out to be an opportunity, but you really need to be sure that the quality is there. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should learn about the 2 warning signs we’ve spotted with Open Lending (including 1 which shouldn’t be ignored) .
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of companies that have proven they can grow earnings.
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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