It is doubtless a positive to see that the Shenzhen Sunrise New Energy Co., Ltd. (SZSE:002256) share price has gained some 52% in the last three months. But that doesn't change the fact that the returns over the last three years have been less than pleasing. After all, the share price is down 24% in the last three years, significantly under-performing the market.

While the stock has risen 10% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

Shenzhen Sunrise New Energy wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually desire strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over the last three years, Shenzhen Sunrise New Energy's revenue dropped 1.6% per year. That's not what investors generally want to see. The stock has disappointed holders over the last three years, falling 8%, annualized. And with no profits, and weak revenue, are you surprised? Of course, sentiment could become too negative, and the company may actually be making progress to profitability.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

If you are thinking of buying or selling Shenzhen Sunrise New Energy stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's good to see that Shenzhen Sunrise New Energy has rewarded shareholders with a total shareholder return of 13% in the last twelve months. That certainly beats the loss of about 0.6% per year over the last half decade. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand Shenzhen Sunrise New Energy better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Shenzhen Sunrise New Energy (at least 1 which is potentially serious) , and understanding them should be part of your investment process.

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.