Did you miss the whopping 769% share price gain from Veeva Systems (NYSE: VEEV)?

For many, the main goal of investing in the stock market is to earn spectacular returns. And we’ve seen some really amazing gains over the years. Just think of the savvy investors who held Veeva Systems Inc. (NYSE: VEEV) over the past five years, when they’ve gained 769%. And that’s just one example of the epic gains made by some long-term investors. The 26% gain over the past three months has also pleased shareholders.

We love happy stories like this. The company should be really proud of this performance!

Check out our latest review for Veeva Systems

In his essay Graham-and-Doddsville super-investors Warren Buffett described how stock prices don’t always rationally reflect a company’s value. One way to look at how market sentiment has changed over time is to look at the interaction between a company’s stock price and its earnings per share (EPS).

In five years, Veeva Systems has managed to increase its earnings per share by 46% per year. This EPS growth is reasonably close to the average annual increase of 54% in the share price. Therefore, one could conclude that sentiment towards stocks has not changed much. In fact, the share price appears to largely reflect the growth in BPA.

The graph below illustrates the evolution of EPS over time (reveal the exact values ​​by clicking on the image).

NYSE: VEEV Earnings Per Share Growth Aug 3, 2021

We are happy to report that the CEO is paid more modestly than most CEOs of similar capitalization companies. But while CEO compensation is still worth checking out, the really important question is whether the company can increase profits in the future. It might be worth taking a look at our free Veeva Systems earnings, revenue and cash flow report.

A different perspective

Veeva Systems shareholders are up 24% over the year. Unfortunately, this does not match the performance of the market. On the positive side, longer-term returns (around 54% per year, over half a decade) look better. It is entirely possible that the company will continue to perform well, even if the stock price gains slow. I find it very interesting to look at the long-term share price as an indicator of company performance. But to really get an overview, we have to take other information into account as well. However, be aware that Veeva Systems shows 1 warning sign in our investment analysis , you must know…

For those who like to find winning investments this free list of growing companies with recent insider buys, might be just the ticket.

Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on the US stock exchanges.

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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
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