Even the best stock pickers will make plenty of bad investments. Unfortunately, shareholders of Zhejiang Tony Electronic Co., Ltd (SHSE:603595) have suffered share price declines over the last year. To wit the share price is down 55% in that time. At least the damage isn't so bad if you look at the last three years, since the stock is down 26% in that time. More recently, the share price has dropped a further 19% in a month.

After losing 9.0% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

Given that Zhejiang Tony Electronic 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.

In the last year Zhejiang Tony Electronic saw its revenue grow by 4.0%. While that may seem decent it isn't great considering the company is still making a loss. It's likely this muted growth has contributed to the share price decline of 55% in the last year. We'd want to see evidence that future revenue growth will be stronger before getting too interested. When a stock falls hard like this, it can signal an over-reaction. Our preference is to wait for a fundamental improvements before buying, but now could be a good time for some research.

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 Zhejiang Tony Electronic's financial health with this free report on its balance sheet.

A Different Perspective

While the broader market lost about 19% in the twelve months, Zhejiang Tony Electronic shareholders did even worse, losing 55%. 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 6% 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. It's always interesting to track share price performance over the longer term. But to understand Zhejiang Tony Electronic better, we need to consider many other factors. For example, we've discovered 2 warning signs for Zhejiang Tony Electronic that you should be aware of before investing here.

But note: Zhejiang Tony Electronic may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com