Latest news with #Experianplc
Yahoo
30-05-2025
- Business
- Yahoo
Experian's (LON:EXPN) earnings growth rate lags the 15% CAGR delivered to shareholders
One simple way to benefit from the stock market is to buy an index fund. But if you choose individual stocks with prowess, you can make superior returns. For example, Experian plc (LON:EXPN) shareholders have seen the share price rise 43% over three years, well in excess of the market return (5.3%, not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 2.9% in the last year, including dividends. Although Experian has shed UK£1.2b from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. 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 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. During three years of share price growth, Experian achieved compound earnings per share growth of 0.5% per year. In comparison, the 13% per year gain in the share price outpaces the EPS growth. So it's fair to assume the market has a higher opinion of the business than it did three years ago. That's not necessarily surprising considering the three-year track record of earnings growth. The image below shows how EPS has tracked over time (if you click on the image you can see greater detail). It might be well worthwhile taking a look at our free report on Experian's earnings, revenue and cash flow. When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Experian the TSR over the last 3 years was 50%, which is better than the share price return mentioned above. This is largely a result of its dividend payments! Experian shareholders are up 2.9% for the year (even including dividends). But that was short of the market average. It's probably a good sign that the company has an even better long term track record, having provided shareholders with an annual TSR of 6% over five years. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. It's always interesting to track share price performance over the longer term. But to understand Experian better, we need to consider many other factors. Take risks, for example - Experian has 1 warning sign we think you should be aware of. If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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.
Yahoo
30-05-2025
- Business
- Yahoo
Experian's (LON:EXPN) earnings growth rate lags the 15% CAGR delivered to shareholders
One simple way to benefit from the stock market is to buy an index fund. But if you choose individual stocks with prowess, you can make superior returns. For example, Experian plc (LON:EXPN) shareholders have seen the share price rise 43% over three years, well in excess of the market return (5.3%, not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 2.9% in the last year, including dividends. Although Experian has shed UK£1.2b from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. 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 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. During three years of share price growth, Experian achieved compound earnings per share growth of 0.5% per year. In comparison, the 13% per year gain in the share price outpaces the EPS growth. So it's fair to assume the market has a higher opinion of the business than it did three years ago. That's not necessarily surprising considering the three-year track record of earnings growth. The image below shows how EPS has tracked over time (if you click on the image you can see greater detail). It might be well worthwhile taking a look at our free report on Experian's earnings, revenue and cash flow. When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Experian the TSR over the last 3 years was 50%, which is better than the share price return mentioned above. This is largely a result of its dividend payments! Experian shareholders are up 2.9% for the year (even including dividends). But that was short of the market average. It's probably a good sign that the company has an even better long term track record, having provided shareholders with an annual TSR of 6% over five years. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. It's always interesting to track share price performance over the longer term. But to understand Experian better, we need to consider many other factors. Take risks, for example - Experian has 1 warning sign we think you should be aware of. If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Sign in to access your portfolio
Yahoo
17-03-2025
- Business
- Yahoo
Should You Investigate Experian plc (LON:EXPN) At UK£35.44?
Experian plc (LON:EXPN) saw significant share price movement during recent months on the LSE, rising to highs of UK£40.07 and falling to the lows of UK£34.26. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Experian's current trading price of UK£35.44 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at Experian's outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for Experian According to our valuation model, Experian seems to be fairly priced at around 3.8% below our intrinsic value, which means if you buy Experian today, you'd be paying a fair price for it. And if you believe the company's true value is £36.86, then there's not much of an upside to gain from mispricing. In addition to this, Experian has a low beta, which suggests its share price is less volatile than the wider market. Future outlook is an important aspect when you're looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it's the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Experian's earnings over the next few years are expected to increase by 51%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value. Are you a shareholder? EXPN's optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven't considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value? Are you a potential investor? If you've been keeping an eye on EXPN, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it's worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop. So while earnings quality is important, it's equally important to consider the risks facing Experian at this point in time. At Simply Wall St, we found 1 warning sign for Experian and we think they deserve your attention. If you are no longer interested in Experian, you can use our free platform to see our list of over 50 other stocks with a high growth potential. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Sign in to access your portfolio
