Unless you borrow money to invest, the potential losses are limited. But if you pick the right stock, you can make a lot more than 100%. For example, the ACI Worldwide, Inc. (NASDAQ:ACIW) share price has soared 108% in the last 1 year. Most would be very happy with that, especially in just one year! It's also good to see the share price up 13% over the last quarter. But this could be related to the strong market, which is up 12% in the last three months. Also impressive, the stock is up 51% over three years, making long term shareholders happy, too.

Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.

ACI Worldwide was able to grow EPS by 154% in the last twelve months. It's fair to say that the share price gain of 108% did not keep pace with the EPS growth. So it seems like the market has cooled on ACI Worldwide, despite the growth. Interesting.

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 ACI Worldwide has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling ACI Worldwide stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's nice to see that ACI Worldwide shareholders have received a total shareholder return of 108% over the last year. That gain is better than the annual TSR over five years, which is 9%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. For example, we've discovered 1 warning sign for ACI Worldwide that you should be aware of before investing here.

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 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.