The five-year shareholder returns and company earnings persist lower as Hangzhou DPtech TechnologiesLtd (SZSE:300768) stock falls a further 12% in past week

We think intelligent long term investing is the way to go. But along the way some stocks are going to perform badly. For example the Hangzhou DPtech Technologies Co.,Ltd. (SZSE:300768) share price dropped 57% over five years. That's not a lot of fun for true believers. We also note that the stock has performed poorly over the last year, with the share price down 35%. The last week also saw the share price slip down another 12%.

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

See our latest analysis for Hangzhou DPtech TechnologiesLtd

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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, Hangzhou DPtech TechnologiesLtd's earnings per share (EPS) dropped by 12% each year. Readers should note that the share price has fallen faster than the EPS, at a rate of 16% per year, over the period. This implies that the market was previously too optimistic about the stock. Having said that, the market is still optimistic, given the P/E ratio of 54.32.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

This free interactive report on Hangzhou DPtech TechnologiesLtd's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

We regret to report that Hangzhou DPtech TechnologiesLtd shareholders are down 34% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 14%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 9% 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. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Hangzhou DPtech TechnologiesLtd you should know about.

Of course Hangzhou DPtech TechnologiesLtd may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com