Earnings growth of 33% over 1 year hasn't been enough to translate into positive returns for Shenzhen Weiguang Biological Products (SZSE:002880) shareholders

Shenzhen Weiguang Biological Products Co., Ltd. (SZSE:002880) shareholders should be happy to see the share price up 12% in the last month. But that doesn't change the fact that the returns over the last year have been less than pleasing. In fact the stock is down 24% in the last year, well below the market return.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

Check out our latest analysis for Shenzhen Weiguang Biological Products

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).

Even though the Shenzhen Weiguang Biological Products share price is down over the year, its EPS actually improved. It's quite possible that growth expectations may have been unreasonable in the past.

The divergence between the EPS and the share price is quite notable, during the year. So it's well worth checking out some other metrics, too.

Shenzhen Weiguang Biological Products managed to grow revenue over the last year, which is usually a real positive. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

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

A Different Perspective

While the broader market lost about 0.6% in the twelve months, Shenzhen Weiguang Biological Products shareholders did even worse, losing 23%. 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. Longer term investors wouldn't be so upset, since they would have made 1.7%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Before forming an opinion on Shenzhen Weiguang Biological Products you might want to consider these 3 valuation metrics.

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.