Descartes Systems Group (TSE:DSG) shareholders have earned a 24% CAGR over the last five years

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But when you pick a company that is really flourishing, you can make more than 100%. For example, the The Descartes Systems Group Inc. (TSE:DSG) share price has soared 189% in the last half decade. Most would be very happy with that. Meanwhile the share price is 1.1% higher than it was a week ago.

Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.

View our latest analysis for Descartes Systems Group

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

Over half a decade, Descartes Systems Group managed to grow its earnings per share at 30% a year. The EPS growth is more impressive than the yearly share price gain of 24% over the same period. So it seems the market isn't so enthusiastic about the stock these days. Of course, with a P/E ratio of 71.17, the market remains optimistic.

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 Descartes Systems Group has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Descartes Systems Group will grow revenue in the future.

A Different Perspective

It's nice to see that Descartes Systems Group shareholders have received a total shareholder return of 48% over the last year. That gain is better than the annual TSR over five years, which is 24%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with Descartes Systems Group .

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Canadian exchanges.

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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.