Guangzhou Wondfo BiotechLtd (SZSE:300482) stock falls 4.1% in past week as three-year earnings and shareholder returns continue downward trend

If you love investing in stocks you're bound to buy some losers. But the long term shareholders of Guangzhou Wondfo Biotech Co.,Ltd (SZSE:300482) have had an unfortunate run in the last three years. Regrettably, they have had to cope with a 61% drop in the share price over that period.

Since Guangzhou Wondfo BiotechLtd has shed CN¥557m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

Check out our latest analysis for Guangzhou Wondfo BiotechLtd

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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 three years that the share price fell, Guangzhou Wondfo BiotechLtd's earnings per share (EPS) dropped by 12% each year. This reduction in EPS is slower than the 27% annual reduction in the share price. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

Dive deeper into Guangzhou Wondfo BiotechLtd's key metrics by checking this interactive graph of Guangzhou Wondfo BiotechLtd's earnings, revenue and cash flow.

A Different Perspective

Although it hurts that Guangzhou Wondfo BiotechLtd returned a loss of 7.6% in the last twelve months, the broader market was actually worse, returning a loss of 8.9%. Longer term investors wouldn't be so upset, since they would have made 1.5%, each year, over five years. In the best case scenario the last year is just a temporary blip on the journey to a brighter future. 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. Even so, be aware that Guangzhou Wondfo BiotechLtd is showing 2 warning signs in our investment analysis , you should know about...

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

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.