As Micro-Tech (Nanjing)Ltd (SHSE:688029) ascends 3.2% this past week, investors may now be noticing the company's three-year earnings growth

While it may not be enough for some shareholders, we think it is good to see the Micro-Tech (Nanjing) Co.,Ltd (SHSE:688029) share price up 19% in a single quarter. But that doesn't change the fact that the returns over the last three years have been disappointing. Indeed, the share price is down a tragic 57% in the last three years. So the improvement may be a real relief to some. After all, could be that the fall was overdone.

The recent uptick of 3.2% could be a positive sign of things to come, so let's take a look at historical fundamentals.

View our latest analysis for Micro-Tech (Nanjing)Ltd

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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, Micro-Tech (Nanjing)Ltd actually saw its earnings per share (EPS) improve by 22% 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.

With a rather small yield of just 1.4% we doubt that the stock's share price is based on its dividend. Revenue is actually up 12% over the three years, so the share price drop doesn't seem to hinge on revenue, either. This analysis is just perfunctory, but it might be worth researching Micro-Tech (Nanjing)Ltd more closely, as sometimes stocks fall unfairly. This could present an opportunity.

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

We know that Micro-Tech (Nanjing)Ltd has improved its bottom line lately, but what does the future have in store? This free report showing analyst forecasts should help you form a view on Micro-Tech (Nanjing)Ltd

A Different Perspective

While the broader market gained around 12% in the last year, Micro-Tech (Nanjing)Ltd shareholders lost 24% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 6% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Micro-Tech (Nanjing)Ltd better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Micro-Tech (Nanjing)Ltd .

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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.