While Shenzhen LiantronicsLtd (SZSE:300269) shareholders have made 24% in 3 years, increasing losses might now be front of mind as stock sheds 17% this week

It's been a soft week for Shenzhen Liantronics Co.,Ltd (SZSE:300269) shares, which are down 17%. But over three years, the returns would have left most investors smiling In the last three years the share price is up, 24%: better than the market.

In light of the stock dropping 17% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive three-year return.

Check out our latest analysis for Shenzhen LiantronicsLtd

Shenzhen LiantronicsLtd wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Shenzhen LiantronicsLtd actually saw its revenue drop by 8.8% per year over three years. The revenue growth might be lacking but the share price has gained 7% each year in that time. Unless the company is going to make profits soon, we would be pretty cautious about it.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

If you are thinking of buying or selling Shenzhen LiantronicsLtd stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Shenzhen LiantronicsLtd shareholders gained a total return of 9.9% during the year. But that return falls short of the market. But at least that's still a gain! Over five years the TSR has been a reduction of 1.1% per year, over five years. It could well be that the business is stabilizing. 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. For example, we've discovered 1 warning sign for Shenzhen LiantronicsLtd that you should be aware of before investing here.

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.