Custom Truck One Source (NYSE:CTOS) climbs 6.1% this week, taking three-year gains to 189%

Custom Truck One Source, Inc. (NYSE:CTOS) shareholders have seen the share price descend 11% over the month. In contrast, the return over three years has been impressive. In three years the stock price has launched 189% higher: a great result. After a run like that some may not be surprised to see prices moderate. The fundamental business performance will ultimately dictate whether the top is in, or if this is a stellar buying opportunity.

After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.

View our latest analysis for Custom Truck One Source

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).

Custom Truck One Source became profitable within the last three years. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

The image below shows how EPS has 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. Dive deeper into the earnings by checking this interactive graph of Custom Truck One Source's earnings, revenue and cash flow.

A Different Perspective

Custom Truck One Source shareholders are down 26% for the year, falling short of the market return. Meanwhile, the broader market slid about 11%, likely weighing on the stock. Fortunately the longer term story is brighter, with total returns averaging about 42% per year over three years. The recent sell-off could be an opportunity if the business remains sound, so it may be worth checking the fundamental data for signs of a long-term growth trend. It's always interesting to track share price performance over the longer term. But to understand Custom Truck One Source better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Custom Truck One Source you should be aware of, and 1 of them can't be ignored.

Custom Truck One Source is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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.