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Cantabil Retail India Limited (NSE:CANTABIL) shareholders might be concerned after seeing the share price drop 12% in the last quarter. But that doesn't undermine the fantastic longer term performance (measured over five years). In fact, during that period, the share price climbed 1043%. Impressive! So we don't think the recent decline in the share price means its story is a sad one. Only time will tell if there is still too much optimism currently reflected in the share price.
We love happy stories like this one. The company should be really proud of that performance!
View our latest analysis for Cantabil Retail India
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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 five years of share price growth, Cantabil Retail India moved from a loss to profitability. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains. Given that the company made a profit three years ago, but not five years ago, it is worth looking at the share price returns over the last three years, too. We can see that the Cantabil Retail India share price is up 204% in the last three years. During the same period, EPS grew by 35% each year. This EPS growth is lower than the 45% average annual increase in the share price over three years. So one can reasonably conclude the market is more enthusiastic about the stock than it was three years ago.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
Dive deeper into Cantabil Retail India's key metrics by checking this interactive graph of Cantabil Retail India's earnings, revenue and cash flow.
A Different Perspective
It's nice to see that Cantabil Retail India shareholders have received a total shareholder return of 112% over the last year. That gain is better than the annual TSR over five years, which is 63%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. Before deciding if you like the current share price, check how Cantabil Retail India scores on these 3 valuation metrics.