Market is not liking China Express AirlinesLTD's (SZSE:002928) earnings decline as stock retreats 5.3% this week

The truth is that if you invest for long enough, you're going to end up with some losing stocks. But the long term shareholders of China Express Airlines Co.,LTD (SZSE:002928) have had an unfortunate run in the last three years. Regrettably, they have had to cope with a 51% drop in the share price over that period. The falls have accelerated recently, with the share price down 26% in the last three months.

After losing 5.3% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

See our latest analysis for China Express AirlinesLTD

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.

China Express AirlinesLTD became profitable within the last five years. That would generally be considered a positive, so we are surprised to see the share price is down. So given the share price is down it's worth checking some other metrics too.

We note that, in three years, revenue has actually grown at a 22% annual rate, so that doesn't seem to be a reason to sell shares. This analysis is just perfunctory, but it might be worth researching China Express AirlinesLTD more closely, as sometimes stocks fall unfairly. This could present an opportunity.

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

We know that China Express AirlinesLTD has improved its bottom line lately, but what does the future have in store? So it makes a lot of sense to check out what analysts think China Express AirlinesLTD will earn in the future (free profit forecasts).

A Different Perspective

China Express AirlinesLTD shareholders have received returns of 25% over twelve months, which isn't far from the general market return. To take a positive view, the gain is pleasing, and it sure beats annualized TSR loss of 2%, which was endured over half a decade. While 'turnarounds seldom turn' there are green shoots for China Express AirlinesLTD. 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. Even so, be aware that China Express AirlinesLTD is showing 1 warning sign in our investment analysis , you should know about...

We will like China Express AirlinesLTD 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.