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Investors more bullish on Seria (TSE:2782) this week as stock pops 11%, despite earnings trending downwards over past three years

Simply Wall St · 1d ago

Low-cost index funds make it easy to achieve average market returns. But across the board there are plenty of stocks that underperform the market. For example, the Seria Co., Ltd. (TSE:2782) share price return of 29% over three years lags the market return in the same period. On the other hand, the more recent gain of 28% over a year is certainly pleasing.

Since the stock has added JP¥27b to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

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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 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.

Over the last three years, Seria failed to grow earnings per share, which fell 2.1% (annualized).

Based on these numbers, we think that the decline in earnings per share may not be a good representation of how the business has changed over the years. Therefore, it makes sense to look into other metrics.

It may well be that Seria revenue growth rate of 5.2% over three years has convinced shareholders to believe in a brighter future. If the company is being managed for the long term good, today's shareholders might be right to hold on.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth
TSE:2782 Earnings and Revenue Growth December 13th 2025

We know that Seria has improved its bottom line lately, but what does the future have in store? So it makes a lot of sense to check out what analysts think Seria will earn in the future (free profit forecasts).

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 Seria, it has a TSR of 40% for the last 3 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

A Different Perspective

We're pleased to report that Seria shareholders have received a total shareholder return of 31% over one year. That's including the dividend. That's better than the annualised return of 0.6% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. Before forming an opinion on Seria you might want to consider these 3 valuation metrics.

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