320% earnings growth over 1 year has not materialized into gains for Visteon (NASDAQ:VC) shareholders over that period

The simplest way to benefit from a rising market is to buy an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Unfortunately the Visteon Corporation (NASDAQ:VC) share price slid 31% over twelve months. That's disappointing when you consider the market returned 22%. At least the damage isn't so bad if you look at the last three years, since the stock is down 3.2% in that time. The falls have accelerated recently, with the share price down 11% in the last three months.

With the stock having lost 3.6% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

See our latest analysis for Visteon

There is no denying that markets are sometimes efficient, but prices do not always reflect 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 unfortunate twelve months during which the Visteon share price fell, it actually saw its earnings per share (EPS) improve by 320%. Of course, the situation might betray previous over-optimism about growth.

It's surprising to see the share price fall so much, despite the improved EPS. So it's easy to justify a look at some other metrics.

Revenue was fairly steady year on year, which isn't usually such a bad thing. But the share price might be lower because the market expected a meaningful improvement, and got none.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Visteon is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for Visteon in this interactive graph of future profit estimates.

A Different Perspective

While the broader market gained around 22% in the last year, Visteon shareholders lost 31%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 4%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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. For instance, we've identified 3 warning signs for Visteon (2 are concerning) that you should be aware of.

But note: Visteon 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.