The Goldlok Holdings(Guangdong) Co.,Ltd. (SZSE:002348) share price has had a bad week, falling 15%. But that doesn't change the fact that the returns over the last three years have been pleasing. To wit, the share price did better than an index fund, climbing 96% during that period.
Although Goldlok Holdings(Guangdong)Ltd has shed CN¥559m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.
Check out our latest analysis for Goldlok Holdings(Guangdong)Ltd
Goldlok Holdings(Guangdong)Ltd wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Goldlok Holdings(Guangdong)Ltd actually saw its revenue drop by 22% per year over three years. Despite the lack of revenue growth, the stock has returned 25%, compound, over three years. If the company is cutting costs profitability could be on the horizon, but the revenue decline is a prima facie concern.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
This free interactive report on Goldlok Holdings(Guangdong)Ltd's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
While it's never nice to take a loss, Goldlok Holdings(Guangdong)Ltd shareholders can take comfort that their trailing twelve month loss of 14% wasn't as bad as the market loss of around 20%. Longer term investors wouldn't be so upset, since they would have made 2%, 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. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Goldlok Holdings(Guangdong)Ltd , and understanding them should be part of your investment process.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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.
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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.