GCL Energy TechnologyLtd (SZSE:002015) stock falls 12% in past week as three-year earnings and shareholder returns continue downward trend

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 GCL Energy Technology Co.,Ltd. (SZSE:002015) have had an unfortunate run in the last three years. Sadly for them, the share price is down 55% in that time. And more recent buyers are having a tough time too, with a drop of 38% in the last year. The falls have accelerated recently, with the share price down 15% in the last three months.

With the stock having lost 12% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

See our latest analysis for GCL Energy TechnologyLtd

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.

During the three years that the share price fell, GCL Energy TechnologyLtd's earnings per share (EPS) dropped by 21% each year. This change in EPS is reasonably close to the 23% average annual decrease in the share price. That suggests that the market sentiment around the company hasn't changed much over that time, despite the disappointment. In this case, it seems that the EPS is guiding the share price.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

Dive deeper into GCL Energy TechnologyLtd's key metrics by checking this interactive graph of GCL Energy TechnologyLtd's earnings, revenue and cash flow.

A Different Perspective

GCL Energy TechnologyLtd shareholders are down 37% for the year (even including dividends), but the market itself is up 6.1%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 6% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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 3 warning signs for GCL Energy TechnologyLtd (2 are a bit concerning!) 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.