Despite losses of 32% for investors over the past year, Windlas Biotech (NSE: WINDLAS) has increased its profits

Windlas Biotech Limited (NSE:WINDLAS) Shareholders should be happy to see the stock price rise 18% in the past month. But that doesn’t change the reality of the past twelve months’ underperformance. The cold reality is that the stock has fallen 33% in one year, underperforming the market.

The recent 12% rise could be a positive sign of things to come, so let’s take a lot of look at historical fundamentals.

See our latest analysis for Windlas Biotech

It is undeniable that markets are sometimes efficient, but prices do not always reflect the underlying performance of companies. An imperfect but reasonable way to gauge changing sentiment around a company is to compare earnings per share (EPS) with the stock price.

Even though Windlas Biotech’s share price is down over the year, its EPS has actually improved. It is entirely possible that growth expectations have been unreasonable in the past.

Looking at these numbers, we would say that the market was expecting much higher growth last year. But other metrics could shed light on why the stock price is falling.

With a low yield of 1.4%, we doubt the dividend will influence the stock price much. Windlas Biotech’s revenue actually increased by 8.9% compared to last year. Since the fundamentals do not easily explain the stock price drop, there could be an opportunity if the market has overreacted.

The company’s revenues and profits (over time) are shown in the image below (click to see exact figures).

NSEI:WINDLAS Earnings and Revenue Growth September 14, 2022

Take a closer look at the financial health of Windlas Biotech with this free report on its balance sheet.

A different perspective

Given that the market gained 7.4% last year, Windlas Biotech shareholders might be upset that they lost 32% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. It’s great to see a nice little 15% rebound in the last three months. It could just be a bounce because the selloff was too aggressive, but fingers crossed it’s the start of a new trend. While it’s worth considering the various impacts that market conditions can have on the stock price, there are other, even more important factors. Example: we have identified 2 warning signs for Windlas Biotech you should be aware.

If you like buying stocks alongside management then you might love this free list of companies. (Hint: insiders bought them).

Please note that the market returns quoted in this article reflect the average market-weighted returns of the stocks currently trading on the IN exchanges.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Robert D. Coleman