Synthesis Electronic Technology Co.,Ltd. (SZSE:300479) shareholders might be concerned after seeing the share price drop 22% in the last quarter. But over three years, the returns would have left most investors smiling To wit, the share price did better than an index fund, climbing 49% during that period.

Since the long term performance has been good but there's been a recent pullback of 12%, let's check if the fundamentals match the share price.

Synthesis Electronic TechnologyLtd 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Synthesis Electronic TechnologyLtd actually saw its revenue drop by 4.0% per year over three years. The revenue growth might be lacking but the share price has gained 14% each year in that time. Unless the company is going to make profits soon, we would be pretty cautious about it.

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

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

Synthesis Electronic TechnologyLtd shareholders are down 24% over twelve months, which isn't far from the market return of -25%. The silver lining is that longer term investors would have made a total return of 4% per year over half a decade. If the stock price has been impacted by changing sentiment, rather than deteriorating business conditions, it could spell opportunity. 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. For instance, we've identified 1 warning sign for Synthesis Electronic TechnologyLtd that you should be aware of.

But note: Synthesis Electronic TechnologyLtd may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.