Aurora Optoelectronics Co.,Ltd. (SHSE:600666) shareholders might be concerned after seeing the share price drop 13% in the last month. On the other hand, over the last twelve months the stock has delivered rather impressive returns. Like an eagle, the share price soared 129% in that time. So it may be that the share price is simply cooling off after a strong rise. Investors should be wondering whether the business itself has the fundamental value required to continue to drive gains.

Although Aurora OptoelectronicsLtd has shed CN¥417m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

Check out our latest analysis for Aurora OptoelectronicsLtd

Aurora OptoelectronicsLtd wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last year Aurora OptoelectronicsLtd saw its revenue grow by 6.8%. That's not a very high growth rate considering it doesn't make profits. So we wouldn't have expected the share price to rise by 129%. We're happy that investors have made money, though we wonder if the increase will be sustained. It's quite likely that the market is considering other factors, not just revenue growth.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

Take a more thorough look at Aurora OptoelectronicsLtd's financial health with this free report on its balance sheet.

A Different Perspective

We're pleased to report that Aurora OptoelectronicsLtd rewarded shareholders with a total shareholder return of 129% over the last year. That's better than the annualized TSR of 13% over the last three years. Given the track record of solid returns over varying time frames, it might be worth putting Aurora OptoelectronicsLtd on your watchlist. 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 - Aurora OptoelectronicsLtd has 3 warning signs we think you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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