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It’s easy to match the overall market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Unfortunately the SBI Life Insurance Company Limited (NSE:SBILIFE) share price slid 16% over twelve months. That’s disappointing when you consider the market returned -6.5%. SBI Life Insurance hasn’t been listed for long, so although we’re wary of recent listings that perform poorly, it may still prove itself with time. It’s up 3.3% in the last seven days.
Check out our latest analysis for SBI Life Insurance
There is no denying that markets are sometimes efficient, but prices do not 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 unfortunate twelve months during which the SBI Life Insurance share price fell, it actually saw its earnings per share (EPS) improve by 13%. It could be that the share price was previously over-hyped. It’s fair to say that the share price does not seem to be reflecting the EPS growth. So it’s easy to justify a look at some other metrics.
Given the yield is quite low, at 0.3%, we doubt the dividend can shed much light on the share price. SBI Life Insurance’s revenue is actually up 12% over the last year. 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 revenue and earnings have changed over time in the image below, (click on the chart to see cashflow).
We’re pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. This free report showing analyst forecasts should help you form a view on SBI Life Insurance
A Different Perspective
SBI Life Insurance shareholders are down 16% for the year (even including dividends), even worse than the market loss of 6.5%. There’s no doubt that’s a disappointment, but the stock may well have fared better in a stronger market. Putting aside the last twelve months, it’s good to see the share price has rebounded by 1.3%, in the last ninety days. Let’s just hope this isn’t the widely-feared ‘dead cat bounce’ (which would indicate further declines to come). Before deciding if you like the current share price, check how SBI Life Insurance scores on these 3 valuation metrics.