close
close

Acushnet Holdings (NYSE:GOLF) loses 4.7% this week as annual returns more closely match earnings growth

The worst outcome after buying shares of a company (assuming no leverage) would be if you lost all your invested money. But there are also positive aspects: you can earn far more than 100% on a really good stock. For example, the price of Acushnet Holdings Corp. (NYSE:GOLF) has risen an impressive 133% over the past five years. Over the past week, the share price has declined by about 4.7%.

Although Acushnet Holdings lost $193 million in market cap this week, let's take a look at the fundamental trends over the long term and see if they have led to higher returns.

Check out our latest analysis for Acushnet Holdings

There's no denying that markets are sometimes efficient, but prices don't always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the five years of share price growth, Acushnet Holdings achieved a compounded earnings per share (EPS) growth of 20% per year. So the EPS growth rate is quite close to the annual share price increase of 18% per year. This suggests that investor sentiment toward the company has not changed much. In fact, it seems like the share price is reacting to the EPS.

The image below shows how EPS has evolved over time (if you click on the image you can see greater detail).

NYSE:GOLF: Earnings per share growth as of July 5, 2024

It might be worth taking a look at our free Acushnet Holdings earnings, revenue and cash flow report.

What about dividends?

It is important to consider both the total shareholder return and the share price return for any stock. The TSR is a return calculation that takes into account the value of cash dividends (assuming that any dividends received were reinvested) and the calculated value of any discounted capital raisings and spin-offs. It is fair to say that the TSR gives a more complete picture for dividend paying stocks. In fact, Acushnet Holdings' TSR over the last 5 years was 153%, which exceeds the share price return mentioned earlier. This is largely due to the dividend payments!

A different perspective

Acushnet Holdings generated a TSR of 17% over the last twelve months. However, that was below the market average. If we look back over the last five years, the returns are even better, at 20% per year over five years. It is quite possible that the company will continue to perform well even if share price gains slow down. While it is worth considering the various impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: we have found that 2 warning signs for Acushnet Holdings You should be aware.

We'll like Acushnet Holdings better if we see some big insider buying. While we wait, check out this free List of undervalued stocks (mostly small caps) with significant recent insider purchases.

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

Valuation is complex, but we help simplify it.

Find out if Acushnet Holdings may be over- or undervalued by checking our comprehensive analysis which includes Fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View free analysis

Do you have feedback on this article? Are you concerned about the content? Get in touch directly from us. Alternatively, send an email to editorial-team (at) simplywallst.com.

This Simply Wall St article is of a general nature. We comment solely on historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.

Valuation is complex, but we help simplify it.

Find out if Acushnet Holdings may be over- or undervalued by checking our comprehensive analysis which includes Fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View free analysis

Do you have feedback on this article? Are you interested in the content? Contact us directly. Alternatively, send an email to [email protected]