It can certainly be frustrating when a stock does not perform as hoped. But it can difficult to make money in a declining market. The Nanfang Ventilator Co., Ltd. (SZSE:300004) share price is down 20% in the last three years. The silver lining to that cloud is that this return is superior to the average market decline of 21%. The last week also saw the share price slip down another 15%.

With the stock having lost 15% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Given that Nanfang Ventilator 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 desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last three years Nanfang Ventilator saw its revenue shrink by 36% per year. That's definitely a weaker result than most pre-profit companies report. Revenue is dropping off fast, and so too is revenue, which is down 6% per year in that time. That makes us wonder whether the stock may be overvalued, but either way it is worth checking the balance sheet if you're thinking of investing.

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

If you are thinking of buying or selling Nanfang Ventilator stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We regret to report that Nanfang Ventilator shareholders are down 18% for the year. Unfortunately, that's worse than the broader market decline of 9.6%. 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. Longer term investors wouldn't be so upset, since they would have made 1.6%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. You could get a better understanding of Nanfang Ventilator's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

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.