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Earnings growth outpaced the 17% return delivered to Tel-Aviv Stock Exchange (TLV:TASE) shareholders over the last year - Simply Wall St

There's no doubt that investing in the stock market is a truly brilliant way to build wealth. But not every stock you buy will perform as well as the overall market. Unfortunately for shareholders, while the The Tel-Aviv Stock Exchange Ltd. (TLV:TASE) share price is up 16% in the last year, that falls short of the market return. Tel-Aviv Stock Exchange hasn't been listed for long, so it's still not clear if it is a long term winner.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

See our latest analysis for Tel-Aviv Stock Exchange

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the last year Tel-Aviv Stock Exchange grew its earnings per share (EPS) by 48%. This EPS growth is significantly higher than the 16% increase in the share price. So it seems like the market has cooled on Tel-Aviv Stock Exchange, despite the growth. Interesting.

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

earnings-per-share-growth TASE:TASE Earnings Per Share Growth January 13th 2022

We know that Tel-Aviv Stock Exchange has improved its bottom line lately, but is it going to grow revenue? This free report showing analyst revenue forecasts should help you figure out if the EPS growth can be sustained.

A Different Perspective

We're happy to report that Tel-Aviv Stock Exchange are up 17% over the year (even including dividends). Unfortunately this falls short of the market return of around 43%. The stock trailed the market by 0.06% in that time, testament to the power of passive investing. But a weak quarter certainly doesn't diminish the longer-term achievements of the business. Before forming an opinion on Tel-Aviv Stock Exchange you might want to consider these 3 valuation metrics.

Of course Tel-Aviv Stock Exchange may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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