It hasn't been the best quarter for Harmonic Inc. (NASDAQ:HLIT) shareholders, since the share price has fallen 20% in that time. But the silver lining is the stock is up over five years. In that time, it is up 64%, which isn't bad, but is below the market return of 86%.
Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.
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, Harmonic moved from a loss to profitability. That would generally be considered a positive, so we'd expect the share price to be up.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
We know that Harmonic has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Harmonic stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
It's good to see that Harmonic has rewarded shareholders with a total shareholder return of 6.1% in the last twelve months. However, the TSR over five years, coming in at 10% per year, is even more impressive. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. It's always interesting to track share price performance over the longer term. But to understand Harmonic better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Harmonic you should know about.
Of course Harmonic may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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.