Tecnon Electronics (SZSE:300650) stock falls 11% in past week as three-year earnings and shareholder returns continue downward trend

Tecnon Electronics Co., Ltd. (SZSE:300650) shareholders should be happy to see the share price up 11% in the last month. If you look at the last three years, the stock price is down. But on the bright side, its return of -21%, is better than the market, which is down 27%.

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

Check out our latest analysis for Tecnon Electronics

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the three years that the share price fell, Tecnon Electronics' earnings per share (EPS) dropped by 19% each year. In comparison the 8% compound annual share price decline isn't as bad as the EPS drop-off. This suggests that the market retains some optimism around long term earnings stability, despite past EPS declines. With a P/E ratio of 50.48, it's fair to say the market sees a brighter future for the business.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of Tecnon Electronics' earnings, revenue and cash flow.

A Different Perspective

The total return of 14% received by Tecnon Electronics shareholders over the last year isn't far from the market return of -14%. The silver lining is that longer term investors would have made a total return of 3% per year over half a decade. If the fundamental data remains strong, and the share price is simply down on sentiment, then this could be an opportunity worth investigating. 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. For example, we've discovered 2 warning signs for Tecnon Electronics that you should be aware of before investing here.

But note: Tecnon Electronics 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com