CD Projekt's (WSE:CDR) Incredible 1360% Share Price Run Shows What Is Possible With Stocks

Buying shares in the best businesses can build meaningful wealth for you and your family. And highest quality companies can see their share prices grow by huge amounts. For example, the CD Projekt S.A. (WSE:CDR) share price is up a whopping 1360% in the last half decade, a handsome return for long term holders. If that doesn't get you thinking about long term investing, we don't know what will. On top of that, the share price is up 22% in about a quarter. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.

Anyone who held for that rewarding ride would probably be keen to talk about it.

Check out our latest analysis for CD Projekt

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Over half a decade, CD Projekt managed to grow its earnings per share at 49% a year. This EPS growth is lower than the 71% average annual increase in the share price. So it's fair to assume the market has a higher opinion of the business than it did five years ago. And that's hardly shocking given the track record of growth. This favorable sentiment is reflected in its (fairly optimistic) P/E ratio of 182.77.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

Dive deeper into CD Projekt's key metrics by checking this interactive graph of CD Projekt's earnings, revenue and cash flow.

A Dividend Lost

The value of past dividends are accounted for in the total shareholder return (TSR), but not in the share price return mentioned above. Many would argue the TSR gives a more complete picture of the value a stock brings to its holders. Over the last 5 years, CD Projekt generated a TSR of 1381%, which is, of course, better than the share price return. Even though the company isn't paying dividends at the moment, it has done in the past.

A Different Perspective

It's nice to see that CD Projekt shareholders have received a total shareholder return of 67% over the last year. However, the TSR over five years, coming in at 71% per year, is even more impressive. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

For those who like to find winning investments this freelist of growing companies with recent insider purchasing, could be just the ticket.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Thank you for reading.