Yahoo Finance AudioCodes (NASDAQ:AUDC) stock falls 13% in past week as three-year earnings and shareholder returns continue downward trend
If you love investing in stocks you're bound to buy some losers. But long term AudioCodes Ltd. (NASDAQ:AUDC) shareholders have had a particularly rough ride in the last three year. Unfortunately, they have held through a 64% decline in the share price in that time.
With the stock having lost 13% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.
View our latest analysis for AudioCodes
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.
AudioCodes saw its EPS decline at a compound rate of 31% per year, over the last three years. This fall in EPS isn't far from the rate of share price decline, which was 29% per year. So it seems that investor expectations of the company are staying pretty steady, despite the disappointment. In this case, it seems that the EPS is guiding the share price.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
It might be well worthwhile taking a look at our free report on AudioCodes' earnings, revenue and cash flow.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for AudioCodes the TSR over the last 3 years was -61%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!
A Different Perspective
AudioCodes shareholders are up 9.8% for the year (even including dividends). But that was short of the market average. But at least that's still a gain! Over five years the TSR has been a reduction of 5% per year, over five years. So this might be a sign the business has turned its fortunes around. It's always interesting to track share price performance over the longer term. But to understand AudioCodes better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with AudioCodes (including 1 which is a bit unpleasant) .
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American 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.
