Uber Technologies (NYSE:UBER) shareholder returns have been strong, earning 122% in 5 years

When you buy a stock there is always a possibility that it could drop 100%. 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 Uber Technologies, Inc. (NYSE:UBER) shareholders would be well aware of this, since the stock is up 122% in five years. It's even up 4.2% in the last week. But this could be related to the buoyant market which is up about 4.2% in a week.

Since the stock has added US$6.1b to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

View our latest analysis for Uber Technologies

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.

During the last half decade, Uber Technologies became profitable. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains.

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

It is of course excellent to see how Uber Technologies has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at Uber Technologies' financial health with this free report on its balance sheet.

A Different Perspective

It's nice to see that Uber Technologies shareholders have received a total shareholder return of 53% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 17% 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 Uber Technologies better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Uber Technologies , and understanding them should be part of your investment process.

Of course Uber Technologies may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.