PVA TePla AG (ETR:TPE) shareholders have seen the share price descend 14% over the month. But that doesn't change the fact that the returns over the last half decade have been spectacular. Indeed, the share price is up a whopping 715% in that time. Arguably, the recent fall is to be expected after such a strong rise. Only time will tell if there is still too much optimism currently reflected in the share price.

Anyone who held for that rewarding ride would probably be keen to talk about it.

Check out our latest analysis for PVA TePla

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

During the five years of share price growth, PVA TePla moved from a loss to profitability. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here. Given that the company made a profit three years ago, but not five years ago, it is worth looking at the share price returns over the last three years, too. We can see that the PVA TePla share price is up 487% in the last three years. In the same period, EPS is up 79% per year. That makes EPS very close to the 80% share price growth, each year, over the same period. So you could reasonably conclude that investor sentiment towards the stock has remained pretty steady, over time. There's a strong correlation between the share price and EPS.

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 PVA TePla has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at PVA TePla's financial health with this free report on its balance sheet.

A Different Perspective

It's nice to see that PVA TePla shareholders have received a total shareholder return of 25% over the last year. However, the TSR over five years, coming in at 52% per year, is even more impressive. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should be aware of the 2 warning signs we've spotted with PVA TePla .

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on DE exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.