Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. Active investors aim to buy stocks that vastly outperform the market – but in the process, they risk under-performance. Investors in MYT Netherlands Parent B.V. (NYSE:MYTE) have tasted that bitter downside in the last year, as the share price dropped 44%. That’s well below the market decline of 11%. We wouldn’t rush to judgement on MYT Netherlands Parent B.V because we don’t have a long term history to look at. Shareholders have had an even rougher run lately, with the share price down 21% in the last 90 days.

While the last year has been tough for MYT Netherlands Parent B.V 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.

See our latest analysis for MYT Netherlands Parent B.V

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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).

Even though the MYT Netherlands Parent B.V share price is down over the year, its EPS actually improved. Of course, the situation might betray previous over-optimism about growth. Extraordinary items have impacted profits over the last twelve months.

It’s surprising to see the share price fall so much, despite the improved EPS. So it’s easy to justify a look at some other metrics.

MYT Netherlands Parent B.V’s revenue is actually up 5.6% over the last year. Since the fundamental metrics don’t readily explain the share price drop, there might be an opportunity if the market has overreacted.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Take a more thorough look at MYT Netherlands Parent B.V’s financial health with this free report on its balance sheet.

A Different Perspective

MYT Netherlands Parent B.V shareholders are down 44% for the year, even worse than the market loss of 11%. There’s no doubt that’s a disappointment, but the stock may well have fared better in a stronger market. The share price decline has continued throughout the most recent three months, down 21%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we’d remain pretty wary until we see some strong business performance. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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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.