The art and science of stock market investing requires a tolerance for losing money on some of the shares you buy. But it should be a priority to avoid stomach churning catastrophes, wherever possible. We wouldn’t blame MYT Netherlands Parent B.V. (NYSE:MYTE) shareholders if they were still in shock after the stock dropped like a lead balloon, down 77% in just one year. That’d be enough to make even the strongest stomachs churn. MYT Netherlands Parent B.V hasn’t been listed for long, so although we’re wary of recent listings that perform poorly, it may still prove itself with time. Shareholders have had an even rougher run lately, with the share price down 19% in the last 90 days.

With the stock having lost 11% in the past week, it’s worth taking a look at business performance and seeing if there’s any red flags.

See our latest analysis for MYT Netherlands Parent B.V

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 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. It could be that the share price was previously over-hyped. Extraordinary items have impacted profits over the last twelve months.

It’s fair to say that the share price does not seem to be reflecting the EPS growth. So it’s well worth checking out some other metrics, too.

MYT Netherlands Parent B.V’s revenue is actually up 9.2% over the last year. Since we can’t easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

This free interactive report on MYT Netherlands Parent B.V’s balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Given that the market gained 3.4% in the last year, MYT Netherlands Parent B.V shareholders might be miffed that they lost 77%. While the aim is to do better than that, it’s worth recalling that even great long-term investments sometimes underperform for a year or more. The share price decline has continued throughout the most recent three months, down 19%, 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. 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. Case in point: We’ve spotted 1 warning sign for MYT Netherlands Parent B.V you should be aware of.

Of course MYT Netherlands Parent B.V may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.