Earnings growth outpaced the impressive 102% return delivered to Quectel Wireless Solutions (SHSE:603236) shareholders over the last year

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you pick the right stock, you can make a lot more than 100%. For example, the Quectel Wireless Solutions Co., Ltd. (SHSE:603236) share price had more than doubled in just one year - up 101%. Also pleasing for shareholders was the 39% gain in the last three months. In contrast, the longer term returns are negative, since the share price is 14% lower than it was three years ago.

Since the stock has added CN¥1.1b to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

See our latest analysis for Quectel Wireless Solutions

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the last year Quectel Wireless Solutions grew its earnings per share (EPS) by 163%. This EPS growth is significantly higher than the 101% increase in the share price. So it seems like the market has cooled on Quectel Wireless Solutions, despite the growth. Interesting.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

We know that Quectel Wireless Solutions has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Quectel Wireless Solutions will grow revenue in the future.

A Different Perspective

We're pleased to report that Quectel Wireless Solutions shareholders have received a total shareholder return of 102% over one year. That's including the dividend. That's better than the annualised return of 5% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. Take risks, for example - Quectel Wireless Solutions has 1 warning sign we think you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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.