It can certainly be frustrating when a stock does not perform as hoped. But it's hard to avoid some disappointing investments when the overall market is down. Over three years the Zhejiang Jingu Company Limited (SZSE:002488) share price fell 12%. The silver lining to that cloud is that this return is superior to the average market decline of 22%. On the other hand the share price has bounced 6.8% over the last week.
While the stock has risen 6.8% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.
See our latest analysis for Zhejiang Jingu
Given that Zhejiang Jingu didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Over three years, Zhejiang Jingu grew revenue at 9.4% per year. That's a pretty good rate of top-line growth. We suspect the broader market malaise contributed to the 4% yearly loss suffered by shareholders. So why not take this opportunity to research this growing business while sentiment is low? If you believe it will trend to profitability, then the share price weakness could be an opportunity.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
It's good to see that Zhejiang Jingu has rewarded shareholders with a total shareholder return of 11% in the last twelve months. That's better than the annualised return of 1.5% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. For instance, we've identified 3 warning signs for Zhejiang Jingu (2 are a bit unpleasant) that you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.