A Look At eSang NetworksLtd's (KOSDAQ:080010) Share Price Returns

eSang Networks Co.,Ltd (KOSDAQ:080010) shareholders should be happy to see the share price up 12% in the last month. But that doesn't change the fact that the returns over the last three years have been less than pleasing. In fact, the share price is down 33% in the last three years, falling well short of the market return.

View our latest analysis for eSang NetworksLtd

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During the three years that the share price fell, eSang NetworksLtd's earnings per share (EPS) dropped by 1.8% each year. This reduction in EPS is slower than the 13% annual reduction in the share price. 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 8.99.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

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

A Different Perspective

eSang NetworksLtd shareholders are up 12% for the year (even including dividends). But that return falls short of the market. On the bright side, that's still a gain, and it's actually better than the average return of 6% over half a decade It is possible that returns will improve along with the business fundamentals. 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 3 warning signs with eSang NetworksLtd , and understanding them should be part of your investment process.

Of course eSang NetworksLtd 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 KR exchanges.

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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. 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.
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