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Investors more bullish on Ichor Holdings (NASDAQ:ICHR) this week as stock rallies 20%, despite earnings trending downwards over past three years

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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 if you buy shares in a really great company, you can more than double your money. For instance the Ichor Holdings, Ltd. (NASDAQ:ICHR) share price is 187% higher than it was three years ago. Most would be happy with that. And in the last week the share price has popped 20%.

Since it's been a strong week for Ichor Holdings shareholders, let's have a look at trend of the longer term fundamentals.

Check out our latest analysis for Ichor Holdings

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Over the last three years, Ichor Holdings failed to grow earnings per share, which fell 11% (annualized).

This means it's unlikely the market is judging the company based on earnings growth. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

It may well be that Ichor Holdings revenue growth rate of 7.8% over three years has convinced shareholders to believe in a brighter future. If the company is being managed for the long term good, today's shareholders might be right to hold on.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
earnings-and-revenue-growth

We know that Ichor Holdings has improved its bottom line lately, but what does the future have in store? If you are thinking of buying or selling Ichor Holdings stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

It's nice to see that Ichor Holdings shareholders have gained 77% (in total) over the last year. That gain actually surpasses the 42% TSR it generated (per year) over three years. These improved returns may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Ichor Holdings better, we need to consider many other factors. For instance, we've identified 1 warning sign for Ichor Holdings that you should be aware of.

But note: Ichor 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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.