Investing in stocks inevitably means buying into some companies that perform poorly. But the long term shareholders of Hainan Shennong Technology Co., Ltd. (SZSE:300189) have had an unfortunate run in the last three years. Regrettably, they have had to cope with a 55% drop in the share price over that period. And the ride hasn't got any smoother in recent times over the last year, with the price 37% lower in that time. Shareholders have had an even rougher run lately, with the share price down 24% in the last 90 days.

With the stock having lost 21% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Given that Hainan Shennong Technology 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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, Hainan Shennong Technology grew revenue at 18% per year. That's a fairly respectable growth rate. That contrasts with the weak share price, which has fallen 16% compounded, over three years. To be frank we're surprised to see revenue growth and share price growth diverge so strongly. It would be well worth taking a closer look at the company, to determine growth trends (and balance sheet strength).

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Take a more thorough look at Hainan Shennong Technology's financial health with this free report on its balance sheet.

A Different Perspective

While the broader market lost about 20% in the twelve months, Hainan Shennong Technology shareholders did even worse, losing 37%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 7% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

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.

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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.