Axcelis Technologies' (NASDAQ:ACLS) five-year earnings growth trails the 14% YoY shareholder returns

Axcelis Technologies, Inc. (NASDAQ:ACLS) shareholders might be concerned after seeing the share price drop 21% in the last quarter. On the bright side the share price is up over the last half decade. However we are not very impressed because the share price is only up 94%, less than the market return of 103%. While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 54% drop, in the last year.

Since it's been a strong week for Axcelis Technologies shareholders, let's have a look at trend of the longer term fundamentals.

We've discovered 1 warning sign about Axcelis Technologies. View them for free.

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Over half a decade, Axcelis Technologies managed to grow its earnings per share at 64% a year. The EPS growth is more impressive than the yearly share price gain of 14% over the same period. Therefore, it seems the market has become relatively pessimistic about the company. This cautious sentiment is reflected in its (fairly low) P/E ratio of 8.37.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

Dive deeper into Axcelis Technologies' key metrics by checking this interactive graph of Axcelis Technologies's earnings, revenue and cash flow.

A Different Perspective

While the broader market gained around 11% in the last year, Axcelis Technologies shareholders lost 54%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 14% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Axcelis Technologies is showing 1 warning sign in our investment analysis , you should know about...

But note: Axcelis Technologies may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.