As Zhejiang Changsheng Sliding Bearings (SZSE:300718) jumps 14% this past week, investors may now be noticing the company's one-year earnings growth

This week we saw the Zhejiang Changsheng Sliding Bearings Co., Ltd. (SZSE:300718) share price climb by 14%. But that doesn't change the reality of under-performance over the last twelve months. After all, the share price is down 19% in the last year, significantly under-performing the market.

Although the past week has been more reassuring for shareholders, they're still in the red over the last year, so let's see if the underlying business has been responsible for the decline.

Check out our latest analysis for Zhejiang Changsheng Sliding Bearings

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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 unfortunate twelve months during which the Zhejiang Changsheng Sliding Bearings share price fell, it actually saw its earnings per share (EPS) improve by 67%. Of course, the situation might betray previous over-optimism about growth.

The divergence between the EPS and the share price is quite notable, during the year. So it's easy to justify a look at some other metrics.

Zhejiang Changsheng Sliding Bearings managed to grow revenue over the last year, which is usually a real positive. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.

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

We know that Zhejiang Changsheng Sliding Bearings has improved its bottom line lately, but what does the future have in store? So it makes a lot of sense to check out what analysts think Zhejiang Changsheng Sliding Bearings will earn in the future (free profit forecasts).

A Different Perspective

While the broader market lost about 6.0% in the twelve months, Zhejiang Changsheng Sliding Bearings shareholders did even worse, losing 18% (even including dividends). Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. On the bright side, long term shareholders have made money, with a gain of 6% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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. Case in point: We've spotted 2 warning signs for Zhejiang Changsheng Sliding Bearings you should be aware of, and 1 of them is concerning.

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.

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.