It is a pleasure to report that the WuXi Biologics (Cayman) Inc. (HKG:2269) is up 55% in the last quarter. But that doesn't change the fact that the returns over the last three years have been disappointing. Regrettably, the share price slid 63% in that period. So it is really good to see an improvement. The rise has some hopeful, but turnarounds are often precarious.

While the last three years has been tough for WuXi Biologics (Cayman) shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

View our latest analysis for WuXi Biologics (Cayman)

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).

WuXi Biologics (Cayman) saw its EPS decline at a compound rate of 2.0% per year, over the last three years. This reduction in EPS is slower than the 28% annual reduction in the share price. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

Dive deeper into WuXi Biologics (Cayman)'s key metrics by checking this interactive graph of WuXi Biologics (Cayman)'s earnings, revenue and cash flow.

A Different Perspective

WuXi Biologics (Cayman)'s TSR for the year was broadly in line with the market average, at 35%. The silver lining is that the share price is up in the short term, which flies in the face of the annualised loss of 7% over the last five years. While 'turnarounds seldom turn' there are green shoots for WuXi Biologics (Cayman). 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 example, we've discovered 2 warning signs for WuXi Biologics (Cayman) that you should be aware of before investing here.

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 Hong Kong exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.