Nexus Infrastructure Adds UK£6.8m To Market Cap, But Investors Still Down 34% From A Year Ago

It’s nice to see the Nexus Infrastructure plc (LON:NEXS) share price up 12% in a week. But in truth the last year hasn’t been good for the share price. The cold reality is that the stock has dropped 34% in one year, under-performing the market.

The recent uptick of 12% could be a positive sign of things to come, so let’s take a look at historical fundamentals.

View our latest analysis for Nexus Infrastructure

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.

Nexus Infrastructure managed to increase earnings per share from a loss to a profit, over the last 12 months.

When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action. So it makes sense to check out some other factors.

Given the yield is quite low, at 1.4%, we doubt the dividend can shed much light on the share price. Nexus Infrastructure managed to grow revenue over the last year, which is usually a real positive. Since the fundamental metrics don’t readily explain the share price drop, there might be an opportunity if the market has overreacted.

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

We know that Nexus Infrastructure has improved its bottom line lately, but what does the future have in store? You can see what analysts are predicting for Nexus Infrastructure in this interactive graph of future profit estimates.

A Different Perspective

While the broader market lost about 5.5% in the twelve months, Nexus Infrastructure shareholders did even worse, losing 34% (even including dividends). However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there’s a good opportunity. 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. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Nexus Infrastructure is showing 3 warning signs in our investment analysis , and 1 of those doesn’t sit too well with us…

We will like Nexus Infrastructure better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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