The three-year loss for Semler Scientific (NASDAQ:SMLR) shareholders likely driven by its shrinking earnings

Semler Scientific, Inc. (NASDAQ:SMLR) shareholders should be happy to see the share price up 30% in the last month. But only the myopic could ignore the astounding decline over three years. In that time the share price has melted like a snowball in the desert, down 72%. So it sure is nice to see a bit of an improvement. The thing to think about is whether the business has really turned around.

While the stock has risen 13% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

Check out our latest analysis for Semler Scientific

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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).

Semler Scientific saw its EPS decline at a compound rate of 12% per year, over the last three years. The share price decline of 35% is actually steeper than the EPS slippage. So it seems the market was too confident about the business, in the past.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

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

A Different Perspective

Semler Scientific shareholders gained a total return of 5.7% during the year. But that was short of the market average. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 6% endured over half a decade. So this might be a sign the business has turned its fortunes around. 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. Even so, be aware that Semler Scientific is showing 2 warning signs in our investment analysis , and 1 of those is a bit concerning...

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 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.