Yahoo Finance TUI (ETR:TUI1) stock falls 3.4% in past week as five-year earnings and shareholder returns continue downward trend
Long term investing is the way to go, but that doesn't mean you should hold every stock forever. We really hate to see fellow investors lose their hard-earned money. Imagine if you held TUI AG (ETR:TUI1) for half a decade as the share price tanked 94%. Furthermore, it's down 18% in about a quarter. That's not much fun for holders. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report. We really feel for shareholders in this scenario. It's a good reminder of the importance of diversification, and it's worth keeping in mind there's more to life than money, anyway.
With the stock having lost 3.4% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.
See our latest analysis for TUI
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
TUI became profitable within the last five years. That would generally be considered a positive, so we are surprised to see the share price is down. Other metrics might give us a better handle on how its value is changing over time.
In contrast to the share price, revenue has actually increased by 11% a year in the five year period. So it seems one might have to take closer look at the fundamentals to understand why the share price languishes. After all, there may be 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).
TUI is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. If you are thinking of buying or selling TUI stock, you should check out this free report showing analyst consensus estimates for future profits.
What About The Total Shareholder Return (TSR)?
We'd be remiss not to mention the difference between TUI's total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Dividends have been really beneficial for TUI shareholders, and that cash payout explains why its total shareholder loss of 78%, over the last 5 years, isn't as bad as the share price return.
A Different Perspective
TUI shareholders are up 3.7% for the year. Unfortunately this falls short of the market return. But at least that's still a gain! Over five years the TSR has been a reduction of 12% per year, over five years. It could well be that the business is stabilizing. Is TUI cheap compared to other companies? These 3 valuation measures might help you decide.
But note: TUI may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on German 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.
