If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. But long term Shanghai MicroPort Endovascular MedTech Co., Ltd. (SHSE:688016) shareholders have had a particularly rough ride in the last three year. Regrettably, they have had to cope with a 55% drop in the share price over that period. Shareholders have had an even rougher run lately, with the share price down 25% in the last 90 days. But this could be related to the weak market, which is down 11% in the same period.

Since Shanghai MicroPort Endovascular MedTech has shed CN¥589m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the unfortunate three years of share price decline, Shanghai MicroPort Endovascular MedTech actually saw its earnings per share (EPS) improve by 23% per year. This is quite a puzzle, and suggests there might be something temporarily buoying the share price. Alternatively, growth expectations may have been unreasonable in the past.

It's worth taking a look at other metrics, because the EPS growth doesn't seem to match with the falling share price.

Revenue is actually up 26% over the three years, so the share price drop doesn't seem to hinge on revenue, either. This analysis is just perfunctory, but it might be worth researching Shanghai MicroPort Endovascular MedTech more closely, as sometimes stocks fall unfairly. This could present an opportunity.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Shanghai MicroPort Endovascular MedTech is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. If you are thinking of buying or selling Shanghai MicroPort Endovascular MedTech stock, you should check out this free report showing analyst consensus estimates for future profits.

A Different Perspective

Shanghai MicroPort Endovascular MedTech shareholders are down 19% over twelve months (even including dividends), which isn't far from the market return of -20%. So last year was actually even worse than the last five years, which cost shareholders 4% per year. It will probably take a substantial improvement in the fundamental performance for the company to reverse this trend. It's always interesting to track share price performance over the longer term. But to understand Shanghai MicroPort Endovascular MedTech better, we need to consider many other factors. For example, we've discovered 2 warning signs for Shanghai MicroPort Endovascular MedTech that you should be aware of before investing here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com