Yahoo Finance The three-year underlying earnings growth at Metropolitan Bank Holding (NYSE:MCB) is promising, but the shareholders are still in the red over that time
Many investors define successful investing as beating the market average over the long term. But its virtually certain that sometimes you will buy stocks that fall short of the market average returns. We regret to report that long term Metropolitan Bank Holding Corp. (NYSE:MCB) shareholders have had that experience, with the share price dropping 38% in three years, versus a market return of about 15%. The falls have accelerated recently, with the share price down 31% in the last three months.
If the past week is anything to go by, investor sentiment for Metropolitan Bank Holding isn't positive, so let's see if there's a mismatch between fundamentals and the share price.
Check out our latest analysis for Metropolitan Bank Holding
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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).
Although the share price is down over three years, Metropolitan Bank Holding actually managed to grow EPS by 13% per year in that time. 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.
Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.
Revenue is actually up 23% over the three years, so the share price drop doesn't seem to hinge on revenue, either. This analysis is just perfunctory, but it might be worth researching Metropolitan Bank Holding more closely, as sometimes stocks fall unfairly. This could present an opportunity.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
We know that Metropolitan Bank Holding has improved its bottom line lately, but what does the future have in store? You can see what analysts are predicting for Metropolitan Bank Holding in this interactive graph of future profit estimates.
A Different Perspective
Metropolitan Bank Holding shareholders gained a total return of 6.9% during the year. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 1.4% endured over half a decade. So this might be a sign the business has turned its fortunes around. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
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.
