Some JinkoSolar Holding Co., Ltd. (NYSE:JKS) shareholders are probably rather concerned to see the share price fall 45% over the last three months. But that doesn't change the fact that the returns over the last year have been very strong. During that period, the share price soared a full 150%. So we think most shareholders won't be too upset about the recent fall. The real question is whether the business is trending in the right direction.
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
Over the last twelve months, JinkoSolar Holding actually shrank its EPS by 76%.
Given the share price gain, we doubt the market is measuring progress with EPS. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.
However the year on year revenue growth of 18% would help. We do see some companies suppress earnings in order to accelerate revenue growth.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
This free interactive report on JinkoSolar Holding's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
It's nice to see that JinkoSolar Holding shareholders have received a total shareholder return of 150% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 10% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand JinkoSolar Holding better, we need to consider many other factors. For instance, we've identified 5 warning signs for JinkoSolar Holding (1 is potentially serious) that you should be aware of.
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 US exchanges.
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. 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 (at) simplywallst.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
