Beacon Roofing Supply (NASDAQ:BECN) shareholders have earned a 66% return over the last year

It was not the best quarter for Beacon Roofing Supply, Inc. (NASDAQ:BECN) shareholders, as the stock price has fallen 10% during that time. But that does not alter the fact that the returns of the past year have been good. The share price has risen by 66% in that time.

Now it’s worth looking at the fundamentals of the company as well, as that will help us determine whether long-term shareholder returns match the performance of the underlying company.

Check out our latest analysis for Beacon Roofing Supply

While markets are a powerful pricing mechanism, stock prices reflect investor sentiment, not just underlying corporate performance. An imperfect but simple way to gauge how a company’s market perception has changed is to compare the change in earnings per share (EPS) with the stock’s price movement.

Over the past year, Beacon Roofing Supply grew its earnings per share from loss to gain.

When a company has just moved into profitability, earnings per share growth isn’t always the best way to look at stock price action.

However, the year-over-year revenue growth of 22% should help. Many companies go through a phase where they have to give up some profits to drive business development, and sometimes that’s for the best.

The image below shows how earnings and earnings have been tracked over time (clicking on the image will show you more details).

profit-and-sales growth
NasdaqGS: BECN Earnings and Revenue Growth September 26, 2021

It’s probably worth noting that we’ve seen significant insider buying in the past quarter, which we view as positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the company. So it makes sense to look at what analysts think Beacon Roofing Supply will earn in the future (free earnings forecasts).

a different perspective

It is good to see that Beacon Roofing Supply has rewarded shareholders over the past twelve months with a total shareholder return of 66%. That gain is better than the annual TSR over five years, which is 3%. Therefore, sentiment around the company seems to be positive lately. Someone with an optimistic perspective might view the recent improvement in TSR as an indication that the company itself is getting better over time. It is always interesting to follow the price development in the longer term. But to better understand Beacon Roofing Supply, we need to consider many other factors. For example, we have established: 2 Beacon Roofing Supply Warning Signs (1 is a bit unpleasant) what you should pay attention to.

There are plenty of other companies that have insiders buying up stock. You probably do not do you want to miss this free list of growing companies that insiders buy.

Keep in mind that the market returns mentioned in this article reflect the market-weighted average returns of stocks currently trading on US exchanges.

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This article from 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 shares and does not take into account your objectives or your financial situation. We strive to provide you with long-term focused analysis powered by fundamental data. Please note that our analysis may not take into account the latest price sensitive company announcements or quality material. Simply Wall St has no position in said stocks.
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