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We think that it's fair to say that the possibility of finding fantastic multi-year winners is what motivates many investors. Mistakes are inevitable, but a single top stock pick can cover any losses, and so much more. One such superstar is Boot Barn Holdings, Inc. (NYSE:BOOT), which saw its share price soar 305% in three years. Also pleasing for shareholders was the 34% gain in the last three months.
There is no denying that markets are sometimes efficient, but prices do not always reflect 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.
During three years of share price growth, Boot Barn Holdings achieved compound earnings per share growth of 52% per year. We don't think it is entirely coincidental that the EPS growth is reasonably close to the 59% average annual increase in the share price. That suggests that the market sentiment around the company hasn't changed much over that time. Au contraire, the share price change has arguably mimicked the EPS growth.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
It is of course excellent to see how Boot Barn Holdings has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling Boot Barn Holdings stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
We're pleased to report that Boot Barn Holdings shareholders have received a total shareholder return of 143% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 20% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. Before spending more time on Boot Barn Holdings it might be wise to click here to see if insiders have been buying or selling shares.
But note: Boot Barn Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.