It is doubtless a positive to see that the Shenzhen Liantronics Co.,Ltd (SZSE:300269) share price has gained some 33% in the last three months. But that doesn't change the fact that the returns over the last three years have been less than pleasing. In fact, the share price is down 29% in the last three years, falling well short of the market return.
While the stock has risen 28% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.
See our latest analysis for Shenzhen LiantronicsLtd
Given that Shenzhen LiantronicsLtd 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last three years Shenzhen LiantronicsLtd saw its revenue shrink by 0.4% per year. That is not a good result. The stock has disappointed holders over the last three years, falling 9%, annualized. That makes sense given the lack of either profits or revenue growth. Of course, sentiment could become too negative, and the company may actually be making progress to profitability.
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 Shenzhen LiantronicsLtd's financial health with this free report on its balance sheet.
A Different Perspective
It's good to see that Shenzhen LiantronicsLtd has rewarded shareholders with a total shareholder return of 11% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 4% per year over five years. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. 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. For example, we've discovered 1 warning sign for Shenzhen LiantronicsLtd that you should be aware of before investing here.
But note: Shenzhen LiantronicsLtd 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.