It hasn't been the best quarter for Ekotechnika AG (ETR:ETE) shareholders, since the share price has fallen 18% in that time. While that might be a setback, it doesn't negate the nice returns received over the last twelve months. In that time we've seen the stock easily surpass the market return, with a gain of 52%.

After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.

View our latest analysis for Ekotechnika

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Ekotechnika was able to grow EPS by 86% in the last twelve months. This EPS growth is significantly higher than the 52% increase in the share price. Therefore, it seems the market isn't as excited about Ekotechnika as it was before. This could be an opportunity. The caution is also evident in the lowish P/E ratio of 1.95.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

Dive deeper into Ekotechnika's key metrics by checking this interactive graph of Ekotechnika's earnings, revenue and cash flow.

A Different Perspective

Ekotechnika shareholders should be happy with the total gain of 52% over the last twelve months, including dividends. We regret to report that the share price is down 18% over ninety days. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 4 warning signs we've spotted with Ekotechnika (including 2 which shouldn't be ignored) .

But note: Ekotechnika 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 German 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.

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