The nature of investing is that you win some, and you lose some. And unfortunately for QuakeSafe Technologies Co., Ltd. (SZSE:300767) shareholders, the stock is a lot lower today than it was a year ago. To wit the share price is down 54% in that time. Even if you look out three years, the returns are still disappointing, with the share price down49% in that time. Furthermore, it's down 41% in about a quarter. That's not much fun for holders.
Since QuakeSafe Technologies has shed CN¥378m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.
View our latest analysis for QuakeSafe Technologies
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.
Unhappily, QuakeSafe Technologies had to report a 22% decline in EPS over the last year. This reduction in EPS is not as bad as the 54% share price fall. So it seems the market was too confident about the business, a year ago. Of course, with a P/E ratio of 82.10, the market remains optimistic.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
Dive deeper into QuakeSafe Technologies' key metrics by checking this interactive graph of QuakeSafe Technologies's earnings, revenue and cash flow.
A Different Perspective
The last twelve months weren't great for QuakeSafe Technologies shares, which performed worse than the market, costing holders 54%, including dividends. Meanwhile, the broader market slid about 7.3%, likely weighing on the stock. The three-year loss of 14% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. Is QuakeSafe Technologies cheap compared to other companies? These 3 valuation measures might help you decide.
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.