Over the last month the GuangDong PaiSheng Intelligent Technology Co.,Ltd (SZSE:300176) has been much stronger than before, rebounding by 32%. But will that repair the damage for the weary investors who have owned this stock as it declined over half a decade? Probably not. In fact, the share price has tumbled down a mountain to land 79% lower after that period. So we don't gain too much confidence from the recent recovery. The million dollar question is whether the company can justify a long term recovery.

While the last five years has been tough for GuangDong PaiSheng Intelligent TechnologyLtd shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

See our latest analysis for GuangDong PaiSheng Intelligent TechnologyLtd

While GuangDong PaiSheng Intelligent TechnologyLtd made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

In the last five years GuangDong PaiSheng Intelligent TechnologyLtd saw its revenue shrink by 25% per year. That puts it in an unattractive cohort, to put it mildly. So it's not that strange that the share price dropped 12% per year in that 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.

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

This free interactive report on GuangDong PaiSheng Intelligent TechnologyLtd's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

We're pleased to report that GuangDong PaiSheng Intelligent TechnologyLtd shareholders have received a total shareholder return of 29% over one year. That certainly beats the loss of about 12% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand GuangDong PaiSheng Intelligent TechnologyLtd better, we need to consider many other factors. To that end, you should learn about the 4 warning signs we've spotted with GuangDong PaiSheng Intelligent TechnologyLtd (including 2 which are potentially serious) .

If you are like me, then you will not want to miss this free list of growing companies that insiders are 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.