It is a pleasure to report that the RemeGen Co., Ltd. (HKG:9995) is up 33% in the last quarter. But that's not enough to compensate for the decline over the last twelve months. Like an arid lake in a warming world, shareholder value has evaporated, with the share price down 56% in that time. Some might say the recent bounce is to be expected after such a bad drop. Arguably, the fall was overdone.

After losing 7.0% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

View our latest analysis for RemeGen

While RemeGen made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

In the last twelve months, RemeGen increased its revenue by 36,563%. That's well above most other pre-profit companies. In contrast the share price is down 56% over twelve months. Yes, the market can be a fickle mistress. This could mean hype has come out of the stock because the bottom line is concerning investors. Generally speaking investors would consider a stock like this less risky once it turns a profit. But when do you think that will happen?

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

RemeGen is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. If you are thinking of buying or selling RemeGen stock, you should check out this free report showing analyst consensus estimates for future profits.

A Different Perspective

We doubt RemeGen shareholders are happy with the loss of 56% over twelve months. That falls short of the market, which lost 13%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. Putting aside the last twelve months, it's good to see the share price has rebounded by 33%, in the last ninety days. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). It's always interesting to track share price performance over the longer term. But to understand RemeGen better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with RemeGen (at least 1 which can't be ignored) , and understanding them should be part of your investment process.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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