Some Green Brick Partners, Inc. (NYSE:GRBK) shareholders are probably rather concerned to see the share price fall 31% over the last three months. But that doesn't change the fact that the returns over the last half decade have been spectacular. In that time, the share price has soared some 304% higher! Arguably, the recent fall is to be expected after such a strong rise. Of course what matters most is whether the business can improve itself sustainably, thus justifying a higher price.

Since the long term performance has been good but there's been a recent pullback of 5.0%, let's check if the fundamentals match the share price.

Check out our latest analysis for Green Brick Partners

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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, Green Brick Partners managed to grow its earnings per share at 61% a year. This EPS growth is higher than the 32% average annual increase in the share price. So one could conclude that the broader market has become more cautious towards the stock. This cautious sentiment is reflected in its (fairly low) P/E ratio of 6.52.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

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

A Different Perspective

It's nice to see that Green Brick Partners shareholders have received a total shareholder return of 88% over the last year. That's better than the annualised return of 32% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.

Of course Green Brick Partners 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.