Baosheng Science and Technology InnovationLtd (SHSE:600973) shareholders are up 6.7% this past week, but still in the red over the last three years

It is doubtless a positive to see that the Baosheng Science and Technology Innovation Co.,Ltd. (SHSE:600973) share price has gained some 36% in the last three months. But that cannot eclipse the less-than-impressive returns over the last three years. In fact, the share price is down 31% in the last three years, falling well short of the market return.

On a more encouraging note the company has added CN¥384m to its market cap in just the last 7 days, so let's see if we can determine what's driven the three-year loss for shareholders.

View our latest analysis for Baosheng Science and Technology InnovationLtd

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Over the three years that the share price declined, Baosheng Science and Technology InnovationLtd's earnings per share (EPS) dropped significantly, falling to a loss. Due to the loss, it's not easy to use EPS as a reliable guide to the business. But it's safe to say we'd generally expect the share price to be lower as a result!

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

It is of course excellent to see how Baosheng Science and Technology InnovationLtd has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling Baosheng Science and Technology InnovationLtd stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While the broader market gained around 7.8% in the last year, Baosheng Science and Technology InnovationLtd shareholders lost 10%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 5% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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. Even so, be aware that Baosheng Science and Technology InnovationLtd is showing 1 warning sign in our investment analysis , you should know about...

But note: Baosheng Science and Technology InnovationLtd may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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