It's easy to feel disappointed if you buy a stock that goes down. But often it is not a reflection of the fundamental business performance. The First Northwest Bancorp (NASDAQ:FNWB) is down 13% over a year, but the total shareholder return is -12% once you include the dividend. And that total return actually beats the market decline of 17%. However, the longer term returns haven't been so bad, with the stock down 5.1% in the last three years.

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.

Check out our latest analysis for First Northwest Bancorp

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Even though the First Northwest Bancorp share price is down over the year, its EPS actually improved. Of course, the situation might betray previous over-optimism about growth.

The divergence between the EPS and the share price is quite notable, during the year. But we might find some different metrics explain the share price movements better.

Given the yield is quite low, at 1.8%, we doubt the dividend can shed much light on the share price. First Northwest Bancorp managed to grow revenue over the last year, which is usually a real positive. 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.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. If you are thinking of buying or selling First Northwest Bancorp stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

While it's certainly disappointing to see that First Northwest Bancorp shares lost 12% throughout the year, that wasn't as bad as the market loss of 17%. Longer term investors wouldn't be so upset, since they would have made 0.5%, each year, over five years. In the best case scenario the last year is just a temporary blip on the journey to a brighter future. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for First Northwest Bancorp you should know about.