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Rotem Shani Entrepreneurship and Investment's (TLV:RTSN) five-year earnings growth trails the stellar shareholder returns

Simply Wall St · 5d ago

When you buy a stock there is always a possibility that it could drop 100%. But on the bright side, you can make far more than 100% on a really good stock. For instance, the price of Rotem Shani Entrepreneurship and Investment Ltd. (TLV:RTSN) stock is up an impressive 194% over the last five years. And in the last week the share price has popped 11%. But this might be partly because the broader market had a good week last week, gaining 5.9%.

Since the stock has added ₪53m 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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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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During five years of share price growth, Rotem Shani Entrepreneurship and Investment achieved compound earnings per share (EPS) growth of 52% per year. This EPS growth is higher than the 24% average annual increase in the share price. So one could conclude that the broader market has become more cautious towards the stock. The reasonably low P/E ratio of 6.67 also suggests market apprehension.

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

earnings-per-share-growth
TASE:RTSN Earnings Per Share Growth January 7th 2026

It might be well worthwhile taking a look at our free report on Rotem Shani Entrepreneurship and Investment's earnings, revenue and cash flow.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Rotem Shani Entrepreneurship and Investment's TSR for the last 5 years was 219%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Investors in Rotem Shani Entrepreneurship and Investment had a tough year, with a total loss of 7.0% (including dividends), against a market gain of about 56%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 26% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Rotem Shani Entrepreneurship and Investment better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Rotem Shani Entrepreneurship and Investment you should be aware of, and 2 of them are a bit concerning.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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