Nomad Foods Limited (NYSE:NOMD) shareholders should be happy to see the share price up 10% in the last quarter. But that doesn't help the fact that the three year return is less impressive. After all, the share price is down 36% in the last three years, significantly under-performing the market.

With the stock having lost 3.3% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Check out our latest analysis for Nomad Foods

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. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Although the share price is down over three years, Nomad Foods actually managed to grow EPS by 2.8% per year in that time. This is quite a puzzle, and suggests there might be something temporarily buoying the share price. Or else the company was over-hyped in the past, and so its growth has disappointed.

It's pretty reasonable to suspect the market was previously to bullish on the stock, and has since moderated expectations. However, taking a look at other business metrics might shed a bit more light on the share price action.

Revenue is actually up 7.1% over the three years, so the share price drop doesn't seem to hinge on revenue, either. It's probably worth investigating Nomad Foods further; while we may be missing something on this analysis, there might also be an opportunity.

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

If you are thinking of buying or selling Nomad Foods stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Nomad Foods shareholders gained a total return of 24% during the year. 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 1.1% 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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Nomad Foods (of which 1 shouldn't be ignored!) you should know about.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).