Investing in ZF Commercial Vehicle Control Systems India (NSE:ZFCVINDIA) three years ago would have delivered you a 41% gain

It hasn’t been the best quarter for ZF Commercial Vehicle Control Systems India Limited (NSE:ZFCVINDIA) shareholders, since the share price has fallen 15% in that time. But at least the stock is up over the last three years. However, it’s unlikely many shareholders are elated with the share price gain of 41% over that time, given the rising market.

Now it’s worth having a look at the company’s fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.

See our latest analysis for ZF Commercial Vehicle Control Systems India

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.

ZF Commercial Vehicle Control Systems India was able to grow its EPS at 3.1% per year over three years, sending the share price higher. In comparison, the 12% per year gain in the share price outpaces the EPS growth. This suggests that, as the business progressed over the last few years, it gained the confidence of market participants. That’s not necessarily surprising considering the three-year track record of earnings growth. This favorable sentiment is reflected in its (fairly optimistic) P/E ratio of 79.47.

The company’s earnings per share (over time) is depicted in the image below (click to see the exact numbers).

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

A Different Perspective

It’s nice to see that ZF Commercial Vehicle Control Systems India shareholders have received a total shareholder return of 9.6% over the last year. And that does include the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 4% per year), it would seem that the stock’s performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It’s always interesting to track share price performance over the longer term. But to understand ZF Commercial Vehicle Control Systems India better, we need to consider many other factors. For instance, we’ve identified 1 warning sign for ZF Commercial Vehicle Control Systems India that you should be aware of.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IN 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.