The nature of investing is that you win some, and you lose some. Unfortunately, shareholders of Five Below, Inc. (NASDAQ:FIVE) have suffered share price declines over the last year. The share price has slid 56% in that time. Even if you look out three years, the returns are still disappointing, with the share price down48% in that time. Unfortunately the share price momentum is still quite negative, with prices down 10% in thirty days.

Since Five Below has shed US$154m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

View our latest analysis for Five Below

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...' 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.

Unhappily, Five Below had to report a 0.4% decline in EPS over the last year. The share price decline of 56% is actually more than the EPS drop. This suggests the EPS fall has made some shareholders more nervous about the business.

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

This free interactive report on Five Below's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

Five Below shareholders are down 56% for the year, but the market itself is up 20%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 2% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. Before deciding if you like the current share price, check how Five Below scores on these 3 valuation metrics.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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.