SciPlay Corporation (NASDAQ:SCPL) shareholders might be concerned after seeing the share price drop 25% in the last month. But over the last year the share price action has been satisfactory. Indeed the stock is up 61% over twelve months, compared to a market return of about 60%.
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…’ 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.
During the last year SciPlay grew its earnings per share (EPS) by 72%. This EPS growth is reasonably close to the 61% increase in the share price. So this implies that investor expectations of the company have remained pretty steady. We don’t think its coincidental that the share price is growing at a similar rate to the earnings per share.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
We know that SciPlay has improved its bottom line lately, but is it going to grow revenue? Check if analysts think SciPlay will grow revenue in the future.
A Different Perspective
With a TSR of 61% over the last year, SciPlay shareholders would be reasonably content, given that’s not far from the broader market return of 60%. However, the price gains have plateaued recently, with the share price up a relatively weak 2.0% in the last quarter or so. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we’ve spotted 1 warning sign for SciPlay you should know about.
Of course SciPlay may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
This article by Simply Wall St is general in nature. 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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