Despite delivering investors losses of 22% over the past 1 year, Instone Real Estate Group (ETR:INS) has been growing its earnings

Instone Real Estate Group SE (ETR:INS) shareholders should be happy to see the share price up 16% in the last month. But in truth the last year hasn't been good for the share price. In fact, the price has declined 23% in a year, falling short of the returns you could get by investing in an index fund.

While the last year has been tough for Instone Real Estate Group shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

View our latest analysis for Instone Real Estate Group

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the unfortunate twelve months during which the Instone Real Estate Group share price fell, it actually saw its earnings per share (EPS) improve by 118%. It could be that the share price was previously over-hyped.

It's fair to say that the share price does not seem to be reflecting the EPS growth. So it's well worth checking out some other metrics, too.

With a low yield of 1.4% we doubt that the dividend influences the share price much. Instone Real Estate Group's revenue is actually up 60% over the last year. Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.

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 Instone Real Estate Group has improved its bottom line over the last three years, but what does the future have in store? You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

Instone Real Estate Group shareholders are down 22% for the year (even including dividends), falling short of the market return. Meanwhile, the broader market slid about 2.4%, likely weighing on the stock. Fortunately the longer term story is brighter, with total returns averaging about 0.8% per year over three years. Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. 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. Take risks, for example - Instone Real Estate Group has 2 warning signs (and 1 which is potentially serious) we think you should know about.

But note: Instone Real Estate Group may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on DE 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.