Despite the downward trend in earnings at Kinaxis (TSE:KXS) the stock increases 5.9%, bringing five-year gains to 113%

When you buy a stock there is always a possibility that it could drop 100%. But on the bright side, you can make far more than 100% on a really good stock. For example, the Kinaxis Inc. (TSE:KXS) share price has soared 113% in the last half decade. Most would be very happy with that. It's also good to see the share price up 22% over the last quarter.

The past week has proven to be lucrative for Kinaxis investors, so let's see if fundamentals drove the company's five-year performance.

View our latest analysis for Kinaxis

There is no denying that markets are sometimes efficient, but prices do not always reflect 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).

Kinaxis' earnings per share are down 4.9% per year, despite strong share price performance over five years.

So it's hard to argue that the earnings per share are the best metric to judge the company, as it may not be optimized for profits at this point. Therefore, it's worth taking a look at other metrics to try to understand the share price movements.

On the other hand, Kinaxis' revenue is growing nicely, at a compound rate of 21% over the last five years. In that case, the company may be sacrificing current earnings per share to drive growth.

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

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

It's nice to see that Kinaxis shareholders have received a total shareholder return of 13% over the last year. However, the TSR over five years, coming in at 16% per year, is even more impressive. It's always interesting to track share price performance over the longer term. But to understand Kinaxis better, we need to consider many other factors. For example, we've discovered 2 warning signs for Kinaxis that you should be aware of before investing here.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

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.