We believe investing is smart because history shows that stock markets go higher in the long term. But if you choose that path, you're going to buy some stocks that fall short of the market. For example, the BJ's Restaurants, Inc. (NASDAQ:BJRI), share price is up over the last year, but its gain of 15% trails the market return. However, the stock hasn't done so well in the longer term, with the stock only up 11% in three years.

Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.

See our latest analysis for BJ's Restaurants

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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 year BJ's Restaurants grew its earnings per share (EPS) by 94%. This EPS growth is significantly higher than the 15% increase in the share price. So it seems like the market has cooled on BJ's Restaurants, despite the growth. Interesting.

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

It is of course excellent to see how BJ's Restaurants has grown profits over the years, but the future is more important for shareholders. This free interactive report on BJ's Restaurants' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

BJ's Restaurants shareholders are up 15% for the year. But that was short of the market average. But at least that's still a gain! Over five years the TSR has been a reduction of 3% per year, over five years. It could well be that the business is stabilizing. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that BJ's Restaurants is showing 1 warning sign in our investment analysis , you should know about...

We will like BJ's Restaurants 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.