Earnings are rising at Ford Motor (NYSE:F) but shareholders still don’t like its prospects

Earnings are rising at Ford Motor (NYSE:F) but shareholders still don’t like its prospects

You can invest in index funds if you want to ensure that your returns are roughly matched to that of the entire market. Conversely individual stocks will provide a wider range of potential returns, and may be lower. For example, Ford Motor Company (NYSE:F)’s share price fell 23% in the past year, down slightly from a nearly 19% drop in the market. The silver lining (for long-term investors) is that the stock is still 16% higher than it was three years ago. In the last ninety days we have seen a 31% drop in the share price. However, one could argue that the price has been influenced by the general market, which is down 17% over the same time frame.

With the stock down 6.1% over the past week, it’s worth taking a look at the performance of the business and seeing if there are any red flags.

See our latest analysis for Ford Motor

It cannot be denied that the markets are sometimes efficient, but prices do not always reflect the underlying business performance. By comparing earnings per share (EPS) and changes in share prices over time, we can get a feel for how investors’ attitudes toward a company have changed over time.

During the unfortunate twelve months during which the Ford Motor share price fell, it actually saw earnings per share (EPS) increase by 189%. It is quite possible that growth expectations have been unreasonable in the past.

The difference between the EPS and the share price during the year is quite remarkable. But we may find a few different metrics that better explain share price movements.

Ford Motor’s revenue is actually up 4.3% over the past year. Since we cannot easily explain stock price movements based on these metrics, it may be worth considering how market sentiment towards the stock has changed.

The graphic below shows how earnings and earnings have changed over time (click image to reveal exact values).

earnings and revenue growth
NYSE: F Earnings and Revenue Growth June 22, 2022

Ford Motor is a well-known stock, with plenty of analyst coverage, which suggests some visibility into future growth. Given that we have a fairly good number of analyst forecasts, it might be worth checking out free Chart showing consensus estimates.

a different perspective

We’re sorry to report that Ford Motor shareholders are down 22% for the year (even including the dividend). Unfortunately, that’s worse than the widespread market drop of 19%. Having said that, it is inevitable that some stocks will be overbought in a falling market. The key is to keep your eye on basic development. Long-term investors would not be so upset, as they would have earned 5% every year for five years. It could be that the recent sell-off is an opportunity, so it may be worth examining fundamental data for signs of a long-term growth trend. While it’s worth considering the various effects market conditions can have on a stock price, there are other factors that are even more important. For example, like risk. every company has, and we’ve seen 3 warning signs for ford motor (1 of which doesn’t sit very well with us!) You should be aware of this.

If we look at some of the big inside buyers, we’d like Ford Motor the better. Watch this while we wait free Notable, recently, a growing list of companies with insider buying.

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

This article by Simple Wall St. is general in nature. We only provide commentary based on historical data and analyst forecasts using an unbiased methodology and our articles are not intended to be financial advice. It does not recommend buying or selling any stock, and does not take into account your objectives, or your financial situation. Our goal is to bring you long term focused analysis powered by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative content. Simple Wall St does not have a position in any of the stocks mentioned.

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