As an investor its worth striving to ensure your overall portfolio beats the market average. But if you try your hand at stock picking, you risk returning less than the market. Unfortunately, that's been the case for longer term Ceragon Networks Ltd. (NASDAQ:CRNT) shareholders, since the share price is down 36% in the last three years, falling well short of the market return of around 11%. Contrary to the longer term story, the last month has been good for stockholders, with a share price gain of 8.6%.

Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns.

View our latest analysis for Ceragon Networks

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.

Ceragon Networks became profitable within the last five years. That would generally be considered a positive, so we are surprised to see the share price is down. So it's worth looking at other metrics to try to understand the share price move.

Revenue is actually up 7.9% over the three years, so the share price drop doesn't seem to hinge on revenue, either. It's probably worth investigating Ceragon Networks further; while we may be missing something on this analysis, there might also be an opportunity.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

We're pleased to report that Ceragon Networks shareholders have received a total shareholder return of 28% over one year. That gain is better than the annual TSR over five years, which is 3%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Ceragon Networks better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Ceragon Networks .

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