Even the best stock pickers will make plenty of bad investments. And there’s no doubt that CMON Limited (HKG:8278) stock has had a really bad year. To wit the share price is down 54% in that time. CMON hasn’t been listed for long, so although we’re wary of recent listings that perform poorly, it may still prove itself with time. The falls have accelerated recently, with the share price down 20% in the last three months. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.

Check out our latest analysis for CMON

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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…’ By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the last year CMON grew its earnings per share, moving from a loss to a profit. When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action. But we may find different metrics more enlightening.

In contrast, the 5.4% drop in revenue is a real concern. Many investors see falling revenue as a likely precursor to lower earnings, so this could well explain the weak share price.

The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).

This free interactive report on CMON’s balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

We doubt CMON shareholders are happy with the loss of 54% over twelve months. That falls short of the market, which lost 3.5%. There’s no doubt that’s a disappointment, but the stock may well have fared better in a stronger market. The share price decline has continued throughout the most recent three months, down 20%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we’d remain pretty wary until we see some strong business performance. Is CMON cheap compared to other companies? These 3 valuation measures might help you decide.

But note: CMON 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 HK exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.