THE INFLUENCE OF PROFITABILITY ON STOCK PRICES OF CONSUMER COMPANIES IN 2020-2024

Abstract

The Indonesian capital market plays a crucial role in the country’s economy as an instrument for long-term fund mobilization. However, during the 2020-2024 period, the Indonesian capital market experienced significant fluctuations due to emerging social issues. These social dynamics impacted the consumer sector, the largest sector on the Indonesia Stock Exchange, and have the potential to influence company stock price movement. This study aims to examine the effect of profitability on company stock prices. This study used a quantitative approach with purposive sampling. Data were obtained from the company’s annual financial reports. Data analysis used panel data regression with model selection tests, classical assumption tests, t-tests, F-tests, and the coefficient of determination. The results of this study indicate that gross profit margin, net profit margin, return on assets, and return on equity simultaneously influenced the stock prices of consumer companies in the 2020-2024 period. Thus, despite the pressure of social issues, company profitability continues to influence company stock price movement. This study is expected to encourage companies to improve their overall profitability performance, especially by increasing net profit while maintaining the company’s image and social responsibility. It is hoped that this research can serve as a reference for future studies examining the effect of profitability on stock price movements by including additional profitability or non-profitability variables