flatexDEGIRO's (ETR:FTK) three-year earnings growth trails the 39% YoY shareholder returns

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you buy shares in a really great company, you can more than double your money. For example, the flatexDEGIRO AG (ETR:FTK) share price has soared 165% in the last three years. That sort of return is as solid as granite. On top of that, the share price is up 31% in about a quarter. But this could be related to the strong market, which is up 18% in the last three months.

Since the stock has added €113m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

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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).

flatexDEGIRO was able to grow its EPS at 30% per year over three years, sending the share price higher. This EPS growth is lower than the 38% average annual increase in the share price. This suggests that, as the business progressed over the last few years, it gained the confidence of market participants. It is quite common to see investors become enamoured with a business, after a few years of solid progress.

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 flatexDEGIRO has grown profits over the years, but the future is more important for shareholders. This free interactive report on flatexDEGIRO's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

We're pleased to report that flatexDEGIRO shareholders have received a total shareholder return of 99% over one year. Of course, that includes the dividend. That's better than the annualised return of 21% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Before forming an opinion on flatexDEGIRO you might want to consider these 3 valuation metrics.

Of course flatexDEGIRO 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 German 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.