Some stocks are best avoided. It hits us in the gut when we see fellow investors suffer a loss. Imagine if you held Sansheng Intellectual Education Technology CO.,LTD. (SZSE:300282) for half a decade as the share price tanked 81%. And we doubt long term believers are the only worried holders, since the stock price has declined 30% over the last twelve months. Unfortunately the share price momentum is still quite negative, with prices down 35% in thirty days. While a drop like that is definitely a body blow, money isn't as important as health and happiness.

Since Sansheng Intellectual Education TechnologyLTD has shed CN¥423m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

Check out our latest analysis for Sansheng Intellectual Education TechnologyLTD

Sansheng Intellectual Education TechnologyLTD wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Over half a decade Sansheng Intellectual Education TechnologyLTD reduced its trailing twelve month revenue by 34% for each year. That puts it in an unattractive cohort, to put it mildly. So it's not altogether surprising to see the share price down 13% per year in the same time period. This kind of price performance makes us very wary, especially when combined with falling revenue. Of course, the poor performance could mean the market has been too severe selling down. That can happen.

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 Sansheng Intellectual Education TechnologyLTD's financial health with this free report on its balance sheet.

A Different Perspective

We regret to report that Sansheng Intellectual Education TechnologyLTD shareholders are down 30% for the year. Unfortunately, that's worse than the broader market decline of 18%. 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 13% over the last half decade. 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. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Sansheng Intellectual Education TechnologyLTD (at least 1 which is a bit unpleasant) , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CN 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.