6.1% earnings growth over 3 years has not materialized into gains for Kona ILtd (KOSDAQ:052400) shareholders over that period

Investing in stocks inevitably means buying into some companies that perform poorly. But the last three years have been particularly tough on longer term Kona I Co.,Ltd. (KOSDAQ:052400) shareholders. Sadly for them, the share price is down 56% in that time. The last week also saw the share price slip down another 14%.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

See our latest analysis for Kona ILtd

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.

During the unfortunate three years of share price decline, Kona ILtd actually saw its earnings per share (EPS) improve by 19% per year. Given the share price reaction, one might suspect that EPS is not a good guide to the business performance during the period (perhaps due to a one-off loss or gain). Alternatively, growth expectations may have been unreasonable in the past.

Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

Revenue is actually up 24% over the three years, so the share price drop doesn't seem to hinge on revenue, either. It's probably worth investigating Kona ILtd further; while we may be missing something on this analysis, there might also be an opportunity.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Take a more thorough look at Kona ILtd's financial health with this free report on its balance sheet.

A Different Perspective

It's good to see that Kona ILtd has rewarded shareholders with a total shareholder return of 6.9% in the last twelve months. That's including the dividend. Having said that, the five-year TSR of 9% a year, is even better. 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 Kona ILtd that you should be aware of before investing here.

We will like Kona ILtd better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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