NEOWIZ's (KOSDAQ:095660) earnings trajectory could turn positive as the stock swells 12% this past week

It's nice to see the NEOWIZ (KOSDAQ:095660) share price up 12% in a week. But that cannot eclipse the less-than-impressive returns over the last three years. In fact, the share price is down 48% in the last three years, falling well short of the market return.

While the stock has risen 12% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

See our latest analysis for NEOWIZ

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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, NEOWIZ's earnings per share (EPS) dropped by 0.9% each year. The share price decline of 19% is actually steeper than the EPS slippage. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy. This increased caution is also evident in the rather low P/E ratio, which is sitting at 6.44.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

We know that NEOWIZ has improved its bottom line lately, but is it going to grow revenue? This free report showing analyst revenue forecasts should help you figure out if the EPS growth can be sustained.

A Different Perspective

While the broader market lost about 0.6% in the twelve months, NEOWIZ shareholders did even worse, losing 47% (even including dividends). However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 6%, each year, over five years. 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. It's always interesting to track share price performance over the longer term. But to understand NEOWIZ better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for NEOWIZ you should be aware of, and 1 of them shouldn't be ignored.

Of course NEOWIZ may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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