Introducing WuXi Biologics (Cayman) (HKG:2269), A Stock That Climbed 33% In The Last Year

WuXi Biologics (Cayman) Inc. (HKG:2269) shareholders have seen the share price descend 11% over the month. While that might be a setback, it doesn't negate the nice returns received over the last twelve months. To wit, it had solidly beat the market, up 33%.

View our latest analysis for WuXi Biologics (Cayman)

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.

During the last year WuXi Biologics (Cayman) grew its earnings per share (EPS) by 95%. It's fair to say that the share price gain of 33% did not keep pace with the EPS growth. Therefore, it seems the market isn't as excited about WuXi Biologics (Cayman) as it was before. This could be an opportunity. Having said that, the market is still optimistic, given the P/E ratio of 137.81.

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

We know that WuXi Biologics (Cayman) has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on WuXi Biologics (Cayman)'s balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

WuXi Biologics (Cayman) boasts a total shareholder return of 33% for the last year. That's better than the more recent three month gain of 3.7%, implying that share price has plateaued recently. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). 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. For instance, we've identified 2 warning signs for WuXi Biologics (Cayman) (1 makes us a bit uncomfortable) that you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.