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Bank of Georgia Group (LON:BGEO) Share Prices Have Dropped 27% In The Last Three Years

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While not a mind-blowing move, it is good to see that the Bank of Georgia Group PLC (LON:BGEO) share price has gained 20% in the last three months. But that doesn't change the fact that the returns over the last three years have been less than pleasing. After all, the share price is down 27% in the last three years, significantly under-performing the market.

View our latest analysis for Bank of Georgia Group

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 unfortunate three years of share price decline, Bank of Georgia Group actually saw its earnings per share (EPS) improve by 5.1% per year. This is quite a puzzle, and suggests there might be something temporarily buoying the share price. Or else the company was over-hyped in the past, and so its growth has disappointed.

It's worth taking a look at other metrics, because the EPS growth doesn't seem to match with the falling share price.

We note that, in three years, revenue has actually grown at a 3.8% annual rate, so that doesn't seem to be a reason to sell shares. This analysis is just perfunctory, but it might be worth researching Bank of Georgia Group more closely, as sometimes stocks fall unfairly. This could present an opportunity.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
earnings-and-revenue-growth

We know that Bank of Georgia Group has improved its bottom line lately, but what does the future have in store? So it makes a lot of sense to check out what analysts think Bank of Georgia Group will earn in the future (free profit forecasts).

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Bank of Georgia Group's total shareholder return (TSR) and its share price return. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Its history of dividend payouts mean that Bank of Georgia Group's TSR, which was a 21% drop over the last 3 years, was not as bad as the share price return.

A Different Perspective

Bank of Georgia Group shareholders have gained 23% over twelve months. This isn't far from the market return of 25%. Shareholders can take comfort that it's certainly better than the yearly loss of about 6% per year endured over the last three years. The optimist would say that this might be the dawn of a brighter future. Before deciding if you like the current share price, check how Bank of Georgia Group scores on these 3 valuation metrics.

We will like Bank of Georgia Group better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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