The Stride, Inc. (NYSE:LRN) share price has had a bad week, falling 15%. But that does not change the realty that the stock's performance has been terrific, over five years. In that time, the share price has soared some 625% higher! Arguably, the recent fall is to be expected after such a strong rise. The most important thing for savvy investors to consider is whether the underlying business can justify the share price gain. It really delights us to see such great share price performance for investors.

Since the long term performance has been good but there's been a recent pullback of 15%, let's check if the fundamentals match the share price.

View our latest analysis for Stride

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Over half a decade, Stride managed to grow its earnings per share at 50% a year. This EPS growth is remarkably close to the 49% average annual increase in the share price. This indicates that investor sentiment towards the company has not changed a great deal. Rather, the share price has approximately tracked EPS growth.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

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

A Different Perspective

It's good to see that Stride has rewarded shareholders with a total shareholder return of 94% in the last twelve months. That gain is better than the annual TSR over five years, which is 49%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. If you would like to research Stride in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.

But note: Stride 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.