Investors in Faurecia (EPA:EO) have unfortunately lost 53% over the last year

Taking the occasional loss comes part and parcel with investing on the stock market. Unfortunately, shareholders of Faurecia S.E. (EPA:EO) have suffered share price declines over the last year. In that relatively short period, the share price has plunged 54%. Notably, shareholders had a tough run over the longer term, too, with a drop of 53% in the last three years. Shareholders have had an even rougher run lately, with the share price down 50% in the last 90 days.

So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.

View our latest analysis for Faurecia

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.

Faurecia managed to increase earnings per share from a loss to a profit, over the last 12 months.

The result looks like a strong improvement to us, so we're surprised the market has sold down the shares. If the company can sustain the earnings growth, this might be an inflection point for the business, which would make right now a really interesting time to study it more closely.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

We know that Faurecia has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Faurecia will grow revenue in the future.

A Different Perspective

Faurecia shareholders are down 53% for the year (even including dividends), but the market itself is up 5.1%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 7% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 5 warning signs with Faurecia (at least 1 which is concerning) , and understanding them should be part of your investment process.

We will like Faurecia better if we see some big insider buys. While we wait, check out this free list of growing companies 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 FR 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.