Despite delivering investors losses of 37% over the past 1 year, Wuhan DR Laser TechnologyLtd (SZSE:300776) has been growing its earnings

Investors can approximate the average market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Unfortunately the Wuhan DR Laser Technology Corp.,Ltd (SZSE:300776) share price slid 38% over twelve months. That contrasts poorly with the market decline of 14%. However, the longer term returns haven't been so bad, with the stock down 17% in the last three years. In contrast, the stock price has popped 8.8% in the last thirty days.

On a more encouraging note the company has added CN¥435m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.

Check out our latest analysis for Wuhan DR Laser TechnologyLtd

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 way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the unfortunate twelve months during which the Wuhan DR Laser TechnologyLtd share price fell, it actually saw its earnings per share (EPS) improve by 41%. 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.

Given the yield is quite low, at 0.8%, we doubt the dividend can shed much light on the share price. Wuhan DR Laser TechnologyLtd's revenue is actually up 38% over the last year. 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 how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

We know that Wuhan DR Laser TechnologyLtd 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 Wuhan DR Laser TechnologyLtd will earn in the future (free profit forecasts).

A Different Perspective

We regret to report that Wuhan DR Laser TechnologyLtd shareholders are down 37% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 14%. 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. Longer term investors wouldn't be so upset, since they would have made 4%, each year, over five years. 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. Take risks, for example - Wuhan DR Laser TechnologyLtd has 2 warning signs (and 1 which is concerning) we think you should know about.

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.

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.