The truth is that if you invest for long enough, you're going to end up with some losing stocks. But the long term shareholders of Aptiv PLC (NYSE:APTV) have had an unfortunate run in the last three years. Regrettably, they have had to cope with a 53% drop in the share price over that period. And the ride hasn't got any smoother in recent times over the last year, with the price 31% lower in that time. Even worse, it's down 21% in about a month, which isn't fun at all.

If the past week is anything to go by, investor sentiment for Aptiv isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

Our free stock report includes 3 warning signs investors should be aware of before investing in Aptiv. Read for free now.

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

Although the share price is down over three years, Aptiv actually managed to grow EPS by 59% per year in that time. This is quite a puzzle, and suggests there might be something temporarily buoying the share price. Or else the company was over-hyped in the past, and so its growth has disappointed.

It's worth taking a look at other metrics, because the EPS growth doesn't seem to match with the falling share price.

We note that, in three years, revenue has actually grown at a 9.1% annual rate, so that doesn't seem to be a reason to sell shares. This analysis is just perfunctory, but it might be worth researching Aptiv more closely, as sometimes stocks fall unfairly. This could present an opportunity.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

Aptiv is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for Aptiv in this interactive graph of future profit estimates.

A Different Perspective

While the broader market gained around 7.4% in the last year, Aptiv shareholders lost 31%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 3% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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. For instance, we've identified 3 warning signs for Aptiv (1 is potentially serious) that you should be aware of.

But note: Aptiv 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 American 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.