This month, we saw the Zhejiang Lante Optics Co., Ltd. (SHSE:688127) up an impressive 42%. But that doesn't change the fact that the returns over the last year have trailed the market. Specifically, the stock returned 14% whereas the market is down , having returned (-14%) over the last year.

While the last year has been tough for Zhejiang Lante Optics shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

See our latest analysis for Zhejiang Lante Optics

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Unhappily, Zhejiang Lante Optics had to report a 36% decline in EPS over the last year. The share price fall of 15% isn't as bad as the reduction in earnings per share. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult. Indeed, with a P/E ratio of 72.02 there is obviously some real optimism that earnings will bounce back.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

Dive deeper into Zhejiang Lante Optics' key metrics by checking this interactive graph of Zhejiang Lante Optics's earnings, revenue and cash flow.

A Different Perspective

We doubt Zhejiang Lante Optics shareholders are happy with the loss of 14% over twelve months (even including dividends). That falls short of the market, which lost 11%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. It's great to see a nice little 26% rebound in the last three months. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. 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 Zhejiang Lante Optics (1 doesn't sit too well with us) that you should be aware of.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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