Buying shares in the best businesses can build meaningful wealth for you and your family. While the best companies are hard to find, but they can generate massive returns over long periods. To wit, the Medpace Holdings, Inc. (NASDAQ:MEDP) share price has soared 395% over five years. And this is just one example of the epic gains achieved by some long term investors. In more good news, the share price has risen 11% in thirty days. We note that Medpace Holdings reported its financial results recently; luckily, you can catch up on the latest revenue and profit numbers in our company report.
On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.
See our latest analysis for Medpace Holdings
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.
During five years of share price growth, Medpace Holdings achieved compound earnings per share (EPS) growth of 39% per year. This EPS growth is remarkably close to the 38% average annual increase in the share price. That suggests that the market sentiment around the company hasn't changed much over that time. In fact, the share price seems to largely reflect the EPS growth.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. It might be well worthwhile taking a look at our free report on Medpace Holdings' earnings, revenue and cash flow.
A Different Perspective
We're pleased to report that Medpace Holdings shareholders have received a total shareholder return of 34% over one year. However, the TSR over five years, coming in at 38% per year, is even more impressive. Before spending more time on Medpace Holdings it might be wise to click here to see if insiders have been buying or selling shares.
Of course Medpace Holdings may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
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.