Those who invested in Boot Barn Holdings (NYSE:BOOT) five years ago are up 277%

When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. Long term Boot Barn Holdings, Inc. (NYSE:BOOT) shareholders would be well aware of this, since the stock is up 277% in five years. It's also good to see the share price up 34% over the last quarter.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

Check out our latest analysis for Boot Barn Holdings

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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, Boot Barn Holdings achieved compound earnings per share (EPS) growth of 28% per year. So the EPS growth rate is rather close to the annualized share price gain of 30% per year. Therefore one could conclude that sentiment towards the shares hasn't morphed very much. Indeed, it would appear the share price is reacting to the EPS.

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 Boot Barn Holdings has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Boot Barn Holdings stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's nice to see that Boot Barn Holdings shareholders have received a total shareholder return of 54% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 30% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Boot Barn Holdings better, we need to consider many other factors. Even so, be aware that Boot Barn Holdings is showing 1 warning sign in our investment analysis , you should know about...

We will like Boot Barn Holdings 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com