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Pandora's (CPH:PNDORA) investors will be pleased with their stellar 283% return over the last five years

Simply Wall St · 06/10 04:03

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on a lighter note, a good company can see its share price rise well over 100%. Long term Pandora A/S (CPH:PNDORA) shareholders would be well aware of this, since the stock is up 244% in five years. And in the last month, the share price has gained 15%. But the price may well have benefitted from a buoyant market, since stocks have gained 8.4% in the last thirty days.

So let's assess the underlying fundamentals over the last 5 years and see if they've moved in lock-step with shareholder returns.

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To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During five years of share price growth, Pandora achieved compound earnings per share (EPS) growth of 25% per year. This EPS growth is reasonably close to the 28% average annual increase in the share price. This indicates that investor sentiment towards the company has not changed a great deal. Indeed, it would appear the share price is reacting to the EPS.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

earnings-per-share-growth
CPSE:PNDORA Earnings Per Share Growth June 10th 2025

We know that Pandora has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Pandora will grow revenue in the future.

Portfolio Valuation calculation on simply wall st

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Pandora, it has a TSR of 283% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

We're pleased to report that Pandora shareholders have received a total shareholder return of 8.2% over one year. Of course, that includes the dividend. Having said that, the five-year TSR of 31% a year, is even better. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 2 warning signs for Pandora that you should be aware of.

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.

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