It's easy to match the overall market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. For example, the 3Peak Incorporated (SHSE:688536) share price is down 33% in the last year. That contrasts poorly with the market decline of 16%. 3Peak hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. More recently, the share price has dropped a further 26% in a month.

With the stock having lost 9.6% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

View our latest analysis for 3Peak

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During the unfortunate twelve months during which the 3Peak share price fell, it actually saw its earnings per share (EPS) improve by 127%. It could be that the share price was previously over-hyped.

It's fair to say that the share price does not seem to be reflecting the EPS growth. So it's easy to justify a look at some other metrics.

With a low yield of 0.2% we doubt that the dividend influences the share price much. 3Peak's revenue is actually up 145% over the last year. Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

We know that 3Peak has improved its bottom line lately, but what does the future have in store? If you are thinking of buying or selling 3Peak stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

We doubt 3Peak shareholders are happy with the loss of 33% over twelve months (even including dividends). That falls short of the market, which lost 16%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. The share price decline has continued throughout the most recent three months, down 26%, 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - 3Peak has 1 warning sign we think you should be aware of.

We will like 3Peak better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider 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.