IES Holdings' (NASDAQ:IESC) earnings growth rate lags the 59% CAGR delivered to shareholders

It hasn't been the best quarter for IES Holdings, Inc. (NASDAQ:IESC) shareholders, since the share price has fallen 21% in that time. But that does not change the realty that the stock's performance has been terrific, over five years. In that time, the share price has soared some 916% higher! Arguably, the recent fall is to be expected after such a strong rise. Of course what matters most is whether the business can improve itself sustainably, thus justifying a higher price. We love happy stories like this one. The company should be really proud of that performance!

Although IES Holdings has shed US$352m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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).

During five years of share price growth, IES Holdings achieved compound earnings per share (EPS) growth of 46% per year. This EPS growth is lower than the 59% average annual increase in the share price. This suggests that market participants hold the company in higher regard, these days. That's not necessarily surprising considering the five-year track record of earnings growth.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

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

A Different Perspective

It's nice to see that IES Holdings shareholders have received a total shareholder return of 37% over the last year. Having said that, the five-year TSR of 59% a year, is even better. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. It's always interesting to track share price performance over the longer term. But to understand IES Holdings better, we need to consider many other factors. Even so, be aware that IES Holdings is showing 1 warning sign in our investment analysis , you should know about...

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