It's nice to see the Nanofilm Technologies International Limited (SGX:MZH) share price up 10% in a week. But that doesn't change the fact that the returns over the last year have been disappointing. Specifically, the stock price slipped by 63% in that time. Some might say the recent bounce is to be expected after such a bad drop. Of course, it could be that the fall was overdone.

On a more encouraging note the company has added S$139m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.

Check out our latest analysis for Nanofilm Technologies International

There is no denying that markets are sometimes efficient, but prices do not always reflect 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).

Unfortunately Nanofilm Technologies International reported an EPS drop of 11% for the last year. This reduction in EPS is not as bad as the 63% share price fall. Unsurprisingly, given the lack of EPS growth, the market seems to be more cautious about the stock.

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

It might be well worthwhile taking a look at our free report on Nanofilm Technologies International's earnings, revenue and cash flow.

A Different Perspective

Given that the market gained 5.2% in the last year, Nanofilm Technologies International shareholders might be miffed that they lost 62% (even including dividends). While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. The share price decline has continued throughout the most recent three months, down 6.3%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. 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. Take risks, for example - Nanofilm Technologies International has 1 warning sign we think you should be aware of.

Of course Nanofilm Technologies International 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 SG 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.