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Saia's (NASDAQ:SAIA) 25% CAGR outpaced the company's earnings growth over the same five-year period

When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But on a lighter note, a good company can see its share price rise well over 100%. Long term Saia, Inc. (NASDAQ:SAIA) shareholders would be well aware of this, since the stock is up 201% in five years. It's also good to see the share price up 12% over the last quarter. But this could be related to the strong market, which is up 7.9% in the last three months.

Since it's been a strong week for Saia shareholders, let's have a look at trend of the longer term fundamentals.

See our latest analysis for Saia

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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).

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Over half a decade, Saia managed to grow its earnings per share at 45% a year. This EPS growth is higher than the 25% average annual increase in the share price. So it seems the market isn't so enthusiastic about the stock these days.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

earnings-per-share-growth
earnings-per-share-growth

It is of course excellent to see how Saia has grown profits over the years, but the future is more important for shareholders. This free interactive report on Saia's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Saia shareholders are down 19% over twelve months, which isn't far from the market return of -19%. The silver lining is that longer term investors would have made a total return of 25% per year over half a decade. If the fundamental data remains strong, and the share price is simply down on sentiment, then this could be an opportunity worth investigating. It's always interesting to track share price performance over the longer term. But to understand Saia better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Saia you should be aware of.

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 US exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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