As Petco Health and Wellness Company (NASDAQ:WOOF) increases 6.7% this past week, investors may now be noticing the company's one-year earnings growth

It's easy to match the overall market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. Unfortunately the Petco Health and Wellness Company, Inc. (NASDAQ:WOOF) share price slid 24% over twelve months. That contrasts poorly with the market decline of 17%. Because Petco Health and Wellness Company hasn't been listed for many years, the market is still learning about how the business performs. Furthermore, it's down 13% in about a quarter. That's not much fun for holders. Of course, this share price action may well have been influenced by the 15% decline in the broader market, throughout the period.

While the last year has been tough for Petco Health and Wellness Company shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

Check out our latest analysis for Petco Health and Wellness Company

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. 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.

The last year saw Petco Health and Wellness Company's EPS really take off. While the business is unlikely to sustain such a high growth rate for long, it's great to see. As you can imagine, the share price action therefore perturbs us. Some different data might shed some more light on the situation.

Petco Health and Wellness Company's revenue is actually up 12% over the last year. Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. You can see what analysts are predicting for Petco Health and Wellness Company in this interactive graph of future profit estimates.

A Different Perspective

Petco Health and Wellness Company shareholders are down 24% for the year, even worse than the market loss of 17%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 13% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand Petco Health and Wellness Company better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Petco Health and Wellness Company (at least 1 which shouldn't be ignored) , and understanding them should be part of your investment process.

Petco Health and Wellness Company is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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.