Propel Funeral Partners Limited's (ASX:PFP) recent weak earnings report didn't cause a big stock movement. However, we believe that investors should be aware of some underlying factors which may be of concern.

View our latest analysis for Propel Funeral Partners

In order to understand the potential for per share returns, it is essential to consider how much a company is diluting shareholders. Propel Funeral Partners expanded the number of shares on issue by 17% over the last year. Therefore, each share now receives a smaller portion of profit. Per share metrics like EPS help us understand how much actual shareholders are benefitting from the company's profits, while the net income level gives us a better view of the company's absolute size. Check out Propel Funeral Partners' historical EPS growth by clicking on this link.

How Is Dilution Impacting Propel Funeral Partners' Earnings Per Share (EPS)?

Unfortunately, we don't have any visibility into its profits three years back, because we lack the data. Even looking at the last year, profit was still down 6.3%. Sadly, earnings per share fell further, down a full 12% in that time. And so, you can see quite clearly that dilution is influencing shareholder earnings.

If Propel Funeral Partners' EPS can grow over time then that drastically improves the chances of the share price moving in the same direction. However, if its profit increases while its earnings per share stay flat (or even fall) then shareholders might not see much benefit. For the ordinary retail shareholder, EPS is a great measure to check your hypothetical "share" of the company's profit.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On Propel Funeral Partners' Profit Performance

Over the last year Propel Funeral Partners issued new shares and so, there's a noteworthy divergence between EPS and net income growth. Therefore, it seems possible to us that Propel Funeral Partners' true underlying earnings power is actually less than its statutory profit. In further bad news, its earnings per share decreased in the last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Case in point: We've spotted 1 warning sign for Propel Funeral Partners you should be aware of.