Shenzhen Everwin Precision Technology's (SZSE:300115) earnings have declined over three years, contributing to shareholders 31% loss

Shenzhen Everwin Precision Technology Co., Ltd. (SZSE:300115) shareholders should be happy to see the share price up 23% in the last quarter. But that doesn't help the fact that the three year return is less impressive. After all, the share price is down 32% in the last three years, significantly under-performing the market.

The recent uptick of 3.0% could be a positive sign of things to come, so let's take a look at historical fundamentals.

Check out our latest analysis for Shenzhen Everwin Precision Technology

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. 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.

Shenzhen Everwin Precision Technology saw its EPS decline at a compound rate of 12% per year, over the last three years. So do you think it's a coincidence that the share price has dropped 12% per year, a very similar rate to the EPS? We don't. So it seems that investor expectations of the company are staying pretty steady, despite the disappointment. Rather, the share price has approximately tracked EPS growth.

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

We know that Shenzhen Everwin Precision Technology has improved its bottom line lately, but is it going to grow revenue? If you're interested, you could check this free report showing consensus revenue forecasts.

A Different Perspective

While the broader market lost about 8.7% in the twelve months, Shenzhen Everwin Precision Technology shareholders did even worse, losing 16%. 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. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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 - Shenzhen Everwin Precision Technology has 1 warning sign we think you should be aware of.

We will like Shenzhen Everwin Precision Technology better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

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.