The three-year decline in earnings might be taking its toll on Zhen Ding Technology Holding (TWSE:4958) shareholders as stock falls 3.4% over the past week

It hasn't been the best quarter for Zhen Ding Technology Holding Limited (TWSE:4958) shareholders, since the share price has fallen 15% in that time. But at least the stock is up over the last three years. In that time, it is up 17%, which isn't bad, but not amazing either.

Since the long term performance has been good but there's been a recent pullback of 3.4%, let's check if the fundamentals match the share price.

View our latest analysis for Zhen Ding Technology Holding

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the three years of share price growth, Zhen Ding Technology Holding actually saw its earnings per share (EPS) drop 3.4% per year.

Companies are not always focussed on EPS growth in the short term, and looking at how the share price has reacted, we don't think EPS is the most important metric for Zhen Ding Technology Holding at the moment. Therefore, it makes sense to look into other metrics.

The revenue drop of 0.2% is as underwhelming as some politicians. What's clear is that historic earnings and revenue aren't matching up with the share price action, very well. So you might have to dig deeper to get a grasp of the situation

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

We know that Zhen Ding Technology Holding has improved its bottom line lately, but what does the future have in store? If you are thinking of buying or selling Zhen Ding Technology Holding stock, you should check out this free report showing analyst profit forecasts.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Zhen Ding Technology Holding's TSR for the last 3 years was 33%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

Zhen Ding Technology Holding provided a TSR of 14% over the last twelve months. Unfortunately this falls short of the market return. The silver lining is that the gain was actually better than the average annual return of 0.9% per year over five year. It is possible that returns will improve along with the business fundamentals. It's always interesting to track share price performance over the longer term. But to understand Zhen Ding Technology Holding better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Zhen Ding Technology Holding 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 Taiwanese 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.