Earnings growth of 37% over 3 years hasn't been enough to translate into positive returns for JinkoSolar Holding (NYSE:JKS) shareholders

The truth is that if you invest for long enough, you're going to end up with some losing stocks. But long term JinkoSolar Holding Co., Ltd. (NYSE:JKS) shareholders have had a particularly rough ride in the last three year. So they might be feeling emotional about the 62% share price collapse, in that time. The more recent news is of little comfort, with the share price down 51% in a year. Furthermore, it's down 12% in about a quarter. That's not much fun for holders.

With the stock having lost 6.0% 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 JinkoSolar 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.

Although the share price is down over three years, JinkoSolar Holding actually managed to grow EPS by 155% per year in that time. This is quite a puzzle, and suggests there might be something temporarily buoying the share price. Alternatively, growth expectations may have been unreasonable in the past.

Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

Given the healthiness of the dividend payments, we doubt that they've concerned the market. We like that JinkoSolar Holding has actually grown its revenue over the last three years. If the company can keep growing revenue, there may be an opportunity for investors. You might have to dig deeper to understand the recent share price weakness.

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

It is of course excellent to see how JinkoSolar Holding has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling JinkoSolar Holding stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Investors in JinkoSolar Holding had a tough year, with a total loss of 49% (including dividends), against a market gain of about 19%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 1.7% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand JinkoSolar Holding better, we need to consider many other factors. Even so, be aware that JinkoSolar Holding is showing 4 warning signs in our investment analysis , you should know about...

Of course JinkoSolar Holding 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 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com