Vera Bradley (NASDAQ:VRA) earnings and shareholder returns have been trending downwards for the last five years, but the stock jumps 10% this past week

It's nice to see the Vera Bradley, Inc. (NASDAQ:VRA) share price up 10% in a week. But over the last half decade, the stock has not performed well. You would have done a lot better buying an index fund, since the stock has dropped 49% in that half decade.

The recent uptick of 10% could be a positive sign of things to come, so let's take a look at historical fundamentals.

See our latest analysis for Vera Bradley

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During five years of share price growth, Vera Bradley moved from a loss to profitability. Most would consider that to be a good thing, so it's counter-intuitive to see the share price declining. Other metrics may better explain the share price move.

Revenue is actually up 0.2% over the time period. So it seems one might have to take closer look at the fundamentals to understand why the share price languishes. After all, there may be an opportunity.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

We know that Vera Bradley has improved its bottom line lately, but what does the future have in store? You can see what analysts are predicting for Vera Bradley in this interactive graph of future profit estimates.

A Different Perspective

Vera Bradley shareholders are down 26% for the year, but the market itself is up 35%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 8% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Vera Bradley better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Vera Bradley , and understanding them should be part of your investment process.

We will like Vera Bradley better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

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.