Investors three-year losses continue as Fox Factory Holding (NASDAQ:FOXF) dips a further 4.9% this week, earnings continue to decline

Fox Factory Holding Corp. (NASDAQ:FOXF) shareholders should be happy to see the share price up 10% in the last month. But that is meagre solace in the face of the shocking decline over three years. In that time the share price has melted like a snowball in the desert, down 71%. Arguably, the recent bounce is to be expected after such a bad drop. The thing to think about is whether the business has really turned around.

After losing 4.9% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

Check out our latest analysis for Fox Factory Holding

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, Fox Factory Holding's earnings per share (EPS) dropped by 15% each year. This reduction in EPS is slower than the 34% annual reduction in the share price. So it seems the market was too confident about the business, in the past.

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

This free interactive report on Fox Factory Holding's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

Fox Factory Holding shareholders are down 52% for the year, but the market itself is up 28%. 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 6% 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Fox Factory Holding , and understanding them should be part of your investment process.

But note: Fox Factory Holding may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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