Axalta Coating Systems' (NYSE:AXTA) 5.1% CAGR outpaced the company's earnings growth over the same five-year period

When you buy and hold a stock for the long term, you definitely want it to provide a positive return. Better yet, you'd like to see the share price move up more than the market average. Unfortunately for shareholders, while the Axalta Coating Systems Ltd. (NYSE:AXTA) share price is up 28% in the last five years, that's less than the market return. Over the last twelve months the stock price has risen a very respectable 11%.

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

View our latest analysis for Axalta Coating Systems

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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 five years of share price growth, Axalta Coating Systems achieved compound earnings per share (EPS) growth of 4.5% per year. So the EPS growth rate is rather close to the annualized share price gain of 5% per year. Therefore one could conclude that sentiment towards the shares hasn't morphed very much. In fact, the share price seems to largely reflect the EPS growth.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

We know that Axalta Coating Systems has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Axalta Coating Systems will grow revenue in the future.

A Different Perspective

Axalta Coating Systems provided a TSR of 11% over the last twelve months. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it's actually better than the average return of 5% over half a decade It is possible that returns will improve along with the business fundamentals. It's always interesting to track share price performance over the longer term. But to understand Axalta Coating Systems better, we need to consider many other factors. Even so, be aware that Axalta Coating Systems 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.