The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. For instance, the price of Manhattan Associates, Inc. (NASDAQ:MANH) stock is up an impressive 248% over the last five years. On the other hand, the stock price has retraced 6.0% in the last week. However, this might be related to the overall market decline of 2.4% in a week.

Although Manhattan Associates has shed US$1.1b from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

Check out our latest analysis for Manhattan Associates

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, Manhattan Associates achieved compound earnings per share (EPS) growth of 20% per year. This EPS growth is slower than the share price growth of 28% per year, over the same period. So it's fair to assume the market has a higher opinion of the business than it did five years ago. That's not necessarily surprising considering the five-year track record of earnings growth. This favorable sentiment is reflected in its (fairly optimistic) P/E ratio of 78.13.

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

We know that Manhattan Associates has improved its bottom line lately, but is it going to grow revenue? If you're interested, you could check this free report showing consensus revenue forecasts.

A Different Perspective

Manhattan Associates provided a TSR of 27% over the year. That's fairly close to the broader market return. We should note here that the five-year TSR is more impressive, at 28% per year. Although the share price growth has slowed, the longer term story points to a business well worth watching. It's always interesting to track share price performance over the longer term. But to understand Manhattan Associates better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Manhattan Associates you should know about.

Of course Manhattan Associates 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.