The three-year underlying earnings growth at Noblelift Intelligent EquipmentLtd (SHSE:603611) is promising, but the shareholders are still in the red over that time

Noblelift Intelligent Equipment Co.,Ltd. (SHSE:603611) shareholders should be happy to see the share price up 12% in the last month. But that doesn't change the fact that the returns over the last three years haven't been great. Specifically, the stock price is down 19% whereas the market is down , having returned (-17%).

If the past week is anything to go by, investor sentiment for Noblelift Intelligent EquipmentLtd isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

See our latest analysis for Noblelift Intelligent EquipmentLtd

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

During the unfortunate three years of share price decline, Noblelift Intelligent EquipmentLtd actually saw its earnings per share (EPS) improve by 21% per year. 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 worth taking a look at other metrics, because the EPS growth doesn't seem to match with the falling share price.

Revenue is actually up 10% over the three years, so the share price drop doesn't seem to hinge on revenue, either. It's probably worth investigating Noblelift Intelligent EquipmentLtd 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).

We know that Noblelift Intelligent EquipmentLtd has improved its bottom line lately, but what does the future have in store? If you are thinking of buying or selling Noblelift Intelligent EquipmentLtd stock, you should check out this free report showing analyst profit forecasts.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Noblelift Intelligent EquipmentLtd's TSR for the last 3 years was -19%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

We regret to report that Noblelift Intelligent EquipmentLtd shareholders are down 11% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 0.6%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. On the bright side, long term shareholders have made money, with a gain of 4% 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. 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 2 warning signs for Noblelift Intelligent EquipmentLtd (1 shouldn't be ignored!) that you should be aware of before investing here.

But note: Noblelift Intelligent EquipmentLtd 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.