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The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But on a lighter note, a good company can see its share price rise well over 100%. Long term Stride, Inc. (NYSE:LRN) shareholders would be well aware of this, since the stock is up 154% in five years. It's even up 4.4% in the last week. But this might be partly because the broader market had a good week last week, gaining 2.1%.
Since the stock has added US$75m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.
Check out our latest analysis for Stride
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During five years of share price growth, Stride achieved compound earnings per share (EPS) growth of 54% per year. The EPS growth is more impressive than the yearly share price gain of 20% over the same period. Therefore, it seems the market has become relatively pessimistic about the company.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
We know that Stride has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Stride's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
It's nice to see that Stride shareholders have received a total shareholder return of 5.1% over the last year. However, that falls short of the 20% TSR per annum it has made for shareholders, each year, over five years. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. Is Stride cheap compared to other companies? These 3 valuation measures might help you decide.
Of course Stride may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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