Strong week for Ramco Systems (NSE:RAMCOSYS) shareholders doesn't alleviate pain of one-year loss

It's nice to see the Ramco Systems Limited (NSE:RAMCOSYS) share price up 18% in a week. But in truth the last year hasn't been good for the share price. In fact, the price has declined 44% in a year, falling short of the returns you could get by investing in an index fund.

The recent uptick of 18% could be a positive sign of things to come, so let's take a lot at historical fundamentals.

Check out our latest analysis for Ramco Systems

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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 last year Ramco Systems saw its earnings per share drop below zero. Some investors no doubt dumped the stock as a result. We hope for shareholders' sake that the company becomes profitable again soon.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

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

A Different Perspective

Ramco Systems shareholders are down 44% for the year, but the market itself is up 29%. 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 4% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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. Case in point: We've spotted 1 warning sign for Ramco Systems you should be aware of.

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