Investors three-year losses continue as WemadeLtd (KOSDAQ:112040) dips a further 9.8% this week, earnings continue to decline

If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. But the last three years have been particularly tough on longer term Wemade Co.,Ltd. (KOSDAQ:112040) shareholders. Sadly for them, the share price is down 67% in that time. The more recent news is of little comfort, with the share price down 46% in a year. Furthermore, it's down 43% in about a quarter. That's not much fun for holders.

Since WemadeLtd has shed ₩88b from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

Our free stock report includes 3 warning signs investors should be aware of before investing in WemadeLtd. Read for free now.

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.

WemadeLtd became profitable within the last five years. We would usually expect to see the share price rise as a result. So it's worth looking at other metrics to try to understand the share price move.

Revenue is actually up 23% over the three years, so the share price drop doesn't seem to hinge on revenue, either. It's probably worth investigating WemadeLtd further; while we may be missing something on this analysis, there might also be an opportunity.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

We know that WemadeLtd has improved its bottom line lately, but what does the future have in store? You can see what analysts are predicting for WemadeLtd in this interactive graph of future profit estimates.

A Different Perspective

While the broader market lost about 5.5% in the twelve months, WemadeLtd shareholders did even worse, losing 46%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 8%, 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. 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. Even so, be aware that WemadeLtd is showing 3 warning signs in our investment analysis , and 2 of those are potentially serious...

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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 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.