Investing in stocks inevitably means buying into some companies that perform poorly. Long term Suzhou Gold Mantis Construction Decoration Co., Ltd. (SZSE:002081) shareholders know that all too well, since the share price is down considerably over three years. So they might be feeling emotional about the 58% share price collapse, in that time. The falls have accelerated recently, with the share price down 15% in the last three months. However, one could argue that the price has been influenced by the general market, which is down 9.9% in the same timeframe.
While the last three years has been tough for Suzhou Gold Mantis Construction Decoration 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.
Check out our latest analysis for Suzhou Gold Mantis Construction Decoration
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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).
During five years of share price growth, Suzhou Gold Mantis Construction Decoration moved from a loss to profitability. We would usually expect to see the share price rise as a result. So it's worth looking at other metrics to try to understand the share price move.
We think that the revenue decline over three years, at a rate of 16% per year, probably had some shareholders looking to sell. After all, if revenue keeps shrinking, it may be difficult to find earnings growth in the future.
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 Suzhou Gold Mantis Construction Decoration has improved its bottom line lately, but what does the future have in store? This free report showing analyst forecasts should help you form a view on Suzhou Gold Mantis Construction Decoration
A Different Perspective
While the broader market lost about 0.2% in the twelve months, Suzhou Gold Mantis Construction Decoration shareholders did even worse, losing 2.3% (even including dividends). However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, longer term shareholders are suffering worse, given the loss of 8% doled out over the last five years. We'd need to see some sustained improvements in the key metrics before we could muster much enthusiasm. It's always interesting to track share price performance over the longer term. But to understand Suzhou Gold Mantis Construction Decoration better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Suzhou Gold Mantis Construction Decoration you should know about.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can 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.