Silver Lake Resources (ASX:SLR) earnings growth rate below 28% CAGR provided to shareholders

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Not the best quarter since Silver Lake Resources Limited (ASX: SLR) shareholders, since the share price fell by 12% during this period. But that doesn’t change the fact that shareholders have received very good returns over the past five years. It’s fair to say that most would be happy with 245% gain during this time. For some, the recent decline would not be surprising after such a rapid rise. Ultimately, trade performance will determine whether the stock price continues its positive long-term trend. While the long-term returns are impressive, we have some sympathy for those who bought more recently, given last year’s 34% decline.

Although Silver Lake Resources lost A$79 million of its market capitalization this week, let’s take a look at its longer-term fundamental trends and see if it has generated any returns.

Check opportunities and risks within the AU metals and mining industry.

It is undeniable that markets are sometimes efficient, but prices do not always reflect the underlying performance of companies. An imperfect but simple way to examine the evolution of a company’s perception by the market is to compare the evolution of earnings per share (EPS) with the evolution of the share price.

In five years of share price growth, Silver Lake Resources has achieved compound earnings per share (EPS) growth of 83% per year. This EPS growth is greater than the average annual share price increase of 28%. One could therefore conclude that the broader market has become more cautious towards the stock.

You can see below how the EPS has evolved over time (find out the exact values ​​by clicking on the image).

ASX: SLR earnings per share growth November 18, 2022

We know that Silver Lake Resources has improved its results over the past three years, but what does the future hold? If you are considering buying or selling shares of Silver Lake Resources, you should check out this FREE detailed balance sheet report.

A different perspective

We regret to report that Silver Lake Resources shareholders are down 34% for the year. Unfortunately, this is worse than the general market decline of 0.6%. However, it could simply be that the stock price was impacted by greater market jitters. It might be worth keeping an eye on the fundamentals, in case there is a good opportunity. On the positive side, long-term shareholders made money, gaining 28% per year over half a decade. It could be that the recent selloff is an opportunity, so it may be worth checking the fundamentals for signs of a long-term growth trend. While it’s worth considering the various impacts that market conditions can have on the stock price, there are other, even more important factors. Example: we have identified 3 warning signs for Silver Lake Resources you should be aware.

If you like buying stocks alongside management then you might love this free list of companies. (Hint: insiders bought them).

Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently trading on AU exchanges.

Valuation is complex, but we help make it simple.

Find out if Silver Lake Resources is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

See the free analysis

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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