Madison Square Garden Sports Corp. (NYSE:MSGS) shareholders might be concerned after seeing the share price drop 11% in the last quarter. On the bright side the share price is up over the last half decade. However we are not very impressed because the share price is only up 13%, less than the market return of 109%.

The past week has proven to be lucrative for Madison Square Garden Sports investors, so let's see if fundamentals drove the company's five-year performance.

Our free stock report includes 4 warning signs investors should be aware of before investing in Madison Square Garden Sports. Read for free now.

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 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 the last half decade, Madison Square Garden Sports became profitable. That would generally be considered a positive, so we'd hope to see the share price to rise. Since the company was unprofitable five years ago, but not three years ago, it's worth taking a look at the returns in the last three years, too. We can see that the Madison Square Garden Sports share price is up 9.2% in the last three years. In the same period, EPS is up 1.7% per year. This EPS growth is lower than the 3.0% average annual increase in the share price over three years. So one can reasonably conclude the market is more enthusiastic about the stock than it was three years ago.

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

We know that Madison Square Garden Sports has improved its bottom line lately, but is it going to grow revenue? If you're interested, you could check this free report showing consensus revenue forecasts.

What About The Total Shareholder Return (TSR)?

We've already covered Madison Square Garden Sports' share price action, but we should also mention its total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Madison Square Garden Sports hasn't been paying dividends, but its TSR of 18% exceeds its share price return of 13%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.

A Different Perspective

Madison Square Garden Sports provided a TSR of 6.7% over the year. That's fairly close to the broader market return. That gain looks pretty satisfying, and it is even better than the five-year TSR of 3% per year. It is possible that management foresight will bring growth well into the future, even if the share price slows down. It's always interesting to track share price performance over the longer term. But to understand Madison Square Garden Sports better, we need to consider many other factors. Even so, be aware that Madison Square Garden Sports is showing 4 warning signs in our investment analysis , and 2 of those can't be ignored...

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 American exchanges.

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