The Fortescue Metals Group (ASX: FMG) share price has been dropping like an anvil over the past year, shedding almost 40%.
With Fortescue shares now trading at around $15.76, down from more than $25 a year ago, is it time to buy Fortescue shares?
Last month's release of the iron ore miner's latest results didn't help the Fortescue share price, with the company's stock continuing its downward trend.
Investors weren't impressed with the figures coming out of Fortescue as the company announced its revenue fell by 20% to US$7.6 billion for the half.
As a result, net profit after tax dropped 54% to US$1.55 billion, while iron ore shipments were up by 3%.
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What happened to Fortescue's bottom line?
As one of Australia's biggest iron ore exporters, Fortescue's fortunes are largely determined by the price of iron ore.
And the price of iron ore dropped from around US$150 per tonne at the start of 2024 to its current price of just over US$100 per tonne.
As such, it's not difficult to see the correlation with Fortescue's dwindling share price.
Fortescue's latest results weren't all doom and gloom.
Is it time to buy Fortescue shares?
The miner ended the half with cash on hand of US$3.4 billion, while net debt was US$2 billion, indicating a healthy balance sheet.
And Fortescue also recorded its highest ever first half shipments totalling 97.1 million tonnes.
Some will see optimism for Fortescue going into the second half but there is much that remains out of the miner's control.
When it comes to the price of iron ore, China, the world's biggest importer and Fortescue's primary customer base, plays a major role.
With China recently announcing plans to cut steel production by up to 50 million tonnes and African iron ore mines ramping up shipments, more downward pressure is expected to impact the price of iron ore.
UBS is tipping the price of iron ore to drop to US$99 per tonne in the second half of FY25.
But longer term, things could improve for Fortescue and its shareholders.
An article by my Foolish colleague Tristan Harrison published this week shows Fortescue's profits could rise to US$3.85 billion by FY29.
With much uncertainty in the world, it is very difficult to determine the future price of iron ore which will certainly influence the value of Fortescue shares.
Still, for investors seeking exposure to iron ore, Fortescue remains a strong option over the long term.
