Some Chengdu Information Technology of Chinese Academy of Sciences Co.,Ltd (SZSE:300678) shareholders are probably rather concerned to see the share price fall 31% over the last three months. Despite this, the stock is a strong performer over the last year, no doubt about that. During that period, the share price soared a full 178%. So some might not be surprised to see the price retrace some. More important, going forward, is how the business itself is going.

Although Chengdu Information Technology of Chinese Academy of SciencesLtd has shed CN¥628m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

View our latest analysis for Chengdu Information Technology of Chinese Academy of SciencesLtd

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.

Chengdu Information Technology of Chinese Academy of SciencesLtd was able to grow EPS by 40% in the last twelve months. This EPS growth is significantly lower than the 178% increase in the share price. This indicates that the market is now more optimistic about the stock. This favorable sentiment is reflected in its (fairly optimistic) P/E ratio of 183.01.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

Dive deeper into Chengdu Information Technology of Chinese Academy of SciencesLtd's key metrics by checking this interactive graph of Chengdu Information Technology of Chinese Academy of SciencesLtd's earnings, revenue and cash flow.

A Different Perspective

We're pleased to report that Chengdu Information Technology of Chinese Academy of SciencesLtd shareholders have received a total shareholder return of 178% over one year. That's including the dividend. That's better than the annualised return of 22% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Chengdu Information Technology of Chinese Academy of SciencesLtd (at least 1 which is concerning) , and understanding them should be part of your investment process.

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.