How DBG Technology (SZSE: 300735) Achieved a Thriving 33% CAGR While Earnings Growth Lagged Behind

Shareholders of DBG Technology Co., Ltd. (SZSE:300735) might feel a bit uneasy lately. The stock has dropped by 23% in the past quarter. However, it’s essential to see the bigger picture. Over the last three years, the share price has surged by an impressive 125%. After such significant growth, a pullback isn’t too surprising. If DBG continues to do well, this dip might present a great chance for investors.

Let’s take a moment to dive into the company’s fundamentals and see how they’ve shaped shareholder returns over time.

Many believe in the efficient markets hypothesis, but the reality is that markets often react strongly, and investors aren’t always rational. One way to gauge market sentiment is by comparing earnings per share (EPS) to the stock price.

DBG Technology managed to increase its EPS by 6.1% annually over the last three years. Meanwhile, the share price soared at a 31% annual rate. This indicates that investors have grown more optimistic about the company. Such enthusiasm is evident in its high P/E ratio of 72.07.

You can see the company’s earnings per share change in the image below (click to view the details).

It might be worth checking out our free report on DBG Technology’s earnings, revenue, and cash flow.

What About Dividends?

When evaluating a stock, it’s crucial to look at total shareholder return (TSR), which includes dividends received (assuming they are reinvested). For DBG Technology, the TSR over the last three years was 136%, surpassing the share price return, largely thanks to its dividend payments!

A Different Look

Good news for DBG Technology shareholders: they’ve seen a total shareholder return of 54% over the past year, which includes dividends. This is better than the annualized return of 11% over the last five years. It suggests the company is making noticeable improvements.

Tracking share price performance over time is interesting, but getting a comprehensive view of DBG Technology also requires looking at various factors. One vital factor is investment risk. We’ve pinpointed 1 warning sign with DBG Technology, and it’s essential to understand this as part of your investment strategy.

You might also stumble upon other great investment opportunities out there.

The market returns mentioned in this article reflect average returns of stocks on Chinese exchanges.

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This article by Simply Wall St is for informational purposes. Our insights are based on historical data and analyst forecasts, and it’s not financial advice. We don’t recommend buying or selling any stocks and don’t consider your personal objectives or financial situation. We’re focused on long-term analysis driven by fundamental data, but our insights may not include the latest updates or qualitative aspects. Simply Wall St has no positions in any described stocks.