Despite the downward trend in earnings at Shenzhen Genvict Technologies (SZSE:002869) the stock rallies 15%, bringing three-year gains to 71%

It hasn't been the best quarter for Shenzhen Genvict Technologies Co., Ltd. (SZSE:002869) shareholders, since the share price has fallen 21% in that time. But don't let that distract from the very nice return generated over three years. After all, the share price is up a market-beating 70% in that time.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

See our latest analysis for Shenzhen Genvict Technologies

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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).

Over the last three years, Shenzhen Genvict Technologies failed to grow earnings per share, which fell 37% (annualized).

So we doubt that the market is looking to EPS for its main judge of the company's value. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

The modest 0.4% dividend yield is unlikely to be propping up the share price. The revenue drop of 5.5% is as underwhelming as some politicians. The only thing that's clear is there is low correlation between Shenzhen Genvict Technologies' share price and its historic fundamental data. Further research may be required!

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

We know that Shenzhen Genvict Technologies has improved its bottom line lately, but what does the future have in store? You can see what analysts are predicting for Shenzhen Genvict Technologies in this interactive graph of future profit estimates.

A Different Perspective

We're pleased to report that Shenzhen Genvict Technologies shareholders have received a total shareholder return of 48% over one year. That's including the dividend. There's no doubt those recent returns are much better than the TSR loss of 5% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. 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. To that end, you should be aware of the 2 warning signs we've spotted with Shenzhen Genvict Technologies .

Of course Shenzhen Genvict Technologies 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 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.