The five-year earnings decline is not helping Pci Technology GroupLtd's (SHSE:600728 share price, as stock falls another 9.2% in past week

It is doubtless a positive to see that the Pci Technology Group Co.,Ltd. (SHSE:600728) share price has gained some 37% in the last three months. But over the last half decade, the stock has not performed well. In fact, the share price is down 43%, which falls well short of the return you could get by buying an index fund.

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

See our latest analysis for Pci Technology GroupLtd

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the five years over which the share price declined, Pci Technology GroupLtd's earnings per share (EPS) dropped by 55% each year. The share price decline of 11% per year isn't as bad as the EPS decline. The relatively muted share price reaction might be because the market expects the business to turn around. With a P/E ratio of 602.84, it's fair to say the market sees a brighter future for the business.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

A Different Perspective

While the broader market gained around 9.8% in the last year, Pci Technology GroupLtd shareholders lost 10.0% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, longer term shareholders are suffering worse, given the loss of 7% doled out over the last five years. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. 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 3 warning signs for Pci Technology GroupLtd you should be aware of, and 1 of them doesn't sit too well with us.

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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.