Floor & Decor Holdings (NYSE:FND) stock performs better than its underlying earnings growth over last five years

The most you can lose on any stock (assuming you don't use leverage) is 100% of 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%. One great example is Floor & Decor Holdings, Inc. (NYSE:FND) which saw its share price drive 132% higher over five years. It's also up 15% in about a month. We note that Floor & Decor Holdings reported its financial results recently; luckily, you can catch up on the latest revenue and profit numbers in our company report.

Since it's been a strong week for Floor & Decor Holdings shareholders, let's have a look at trend of the longer term fundamentals.

Check out our latest analysis for Floor & Decor 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. 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.

Over half a decade, Floor & Decor Holdings managed to grow its earnings per share at 10% a year. This EPS growth is lower than the 18% average annual increase in the share price. This suggests that market participants hold the company in higher regard, these days. And that's hardly shocking given the track record of growth. This optimism is visible in its fairly high P/E ratio of 56.68.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

This free interactive report on Floor & Decor Holdings' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

Floor & Decor Holdings provided a TSR of 11% over the last twelve months. But that return falls short of the market. If we look back over five years, the returns are even better, coming in at 18% per year for five years. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. Before spending more time on Floor & Decor Holdings it might be wise to click here to see if insiders have been buying or selling shares.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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.