Investing in stocks comes with the risk that the share price will fall. And there's no doubt that Shenzhen Kexin Communication Technologies Co.,Ltd (SZSE:300565) stock has had a really bad year. The share price is down a hefty 51% in that time. However, the longer term returns haven't been so bad, with the stock down 11% in the last three years. The falls have accelerated recently, with the share price down 26% in the last three months.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

See our latest analysis for Shenzhen Kexin Communication TechnologiesLtd

Shenzhen Kexin Communication TechnologiesLtd isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Shenzhen Kexin Communication TechnologiesLtd's revenue didn't grow at all in the last year. In fact, it fell 10%. That's not what investors generally want to see. The share price drop of 51% is understandable given the company doesn't have profits to boast of. Fingers crossed this is the low ebb for the stock. We don't generally like to own companies with falling revenues and no profits, so we're pretty cautious of this one, at the moment.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

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

We regret to report that Shenzhen Kexin Communication TechnologiesLtd shareholders are down 51% for the year. Unfortunately, that's worse than the broader market decline of 6.5%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 5%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Shenzhen Kexin Communication TechnologiesLtd is showing 3 warning signs in our investment analysis , and 2 of those are significant...

We will like Shenzhen Kexin Communication TechnologiesLtd better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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.