The 7.0% return this week takes Universal Technical Institute's (NYSE:UTI) shareholders five-year gains to 207%

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But on a lighter note, a good company can see its share price rise well over 100%. One great example is Universal Technical Institute, Inc. (NYSE:UTI) which saw its share price drive 207% higher over five years. It's even up 7.0% in the last week.

The past week has proven to be lucrative for Universal Technical Institute investors, so let's see if fundamentals drove the company's five-year performance.

Check out our latest analysis for Universal Technical Institute

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the five years of share price growth, Universal Technical Institute moved from a loss to profitability. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here. Since the company was unprofitable five years ago, but not three years ago, it's worth taking a look at the returns in the last three years, too. We can see that the Universal Technical Institute share price is up 140% in the last three years. During the same period, EPS grew by 74% each year. This EPS growth is higher than the 34% average annual increase in the share price over the same three years. So you might conclude the market is a little more cautious about the stock, these days.

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

We know that Universal Technical Institute has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Universal Technical Institute's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Universal Technical Institute has rewarded shareholders with a total shareholder return of 95% in the last twelve months. That's better than the annualised return of 25% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 2 warning signs for Universal Technical Institute you should be aware of, and 1 of them makes us a bit uncomfortable.

For those who like to find winning investments this free list of undervalued 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.