This week we saw the Progyny, Inc. (NASDAQ:PGNY) share price climb by 11%. But only the myopic could ignore the astounding decline over three years. Indeed, the share price is down a whopping 73% in the last three years. So it sure is nice to see a bit of an improvement. The thing to think about is whether the business has really turned around.

Although the past week has been more reassuring for shareholders, they're still in the red over the last three years, so let's see if the underlying business has been responsible for the decline.

View our latest analysis for Progyny

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

Progyny saw its EPS decline at a compound rate of 8.0% per year, over the last three years. This reduction in EPS is slower than the 35% annual reduction in the share price. So it seems the market was too confident about the business, in the past.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of Progyny's earnings, revenue and cash flow.

A Different Perspective

Progyny shareholders are down 45% for the year, but the market itself is up 38%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 5% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Progyny better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Progyny you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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

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