On average, over time, stock markets tend to rise higher. This makes investing attractive. But if when you choose to buy stocks, some of them will be below average performers. For example, the BJ's Restaurants, Inc. (NASDAQ:BJRI), share price is up over the last year, but its gain of 23% trails the market return. Zooming out, the stock is actually down 6.2% in the last three years.

Since the long term performance has been good but there's been a recent pullback of 8.9%, let's check if the fundamentals match the share price.

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the last year BJ's Restaurants grew its earnings per share (EPS) by 94%. It's fair to say that the share price gain of 23% did not keep pace with the EPS growth. So it seems like the market has cooled on BJ's Restaurants, despite the growth. Interesting.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

We know that BJ's Restaurants has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on BJ's Restaurants' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

BJ's Restaurants provided a TSR of 23% over the last twelve months. But that return falls short of the market. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 3% endured over half a decade. So this might be a sign the business has turned its fortunes around. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 2 warning signs we've spotted with BJ's Restaurants .

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.