As an investor its worth striving to ensure your overall portfolio beats the market average. But if you try your hand at stock picking, your risk returning less than the market. We regret to report that long term UTour Group Co., Ltd. (SZSE:002707) shareholders have had that experience, with the share price dropping 17% in three years, versus a market decline of about 7.2%. More recently, the share price has dropped a further 15% in a month.

If the past week is anything to go by, investor sentiment for UTour Group isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

See our latest analysis for UTour Group

Because UTour Group made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. 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 UTour Group saw its revenue shrink by 91% per year. That means its revenue trend is very weak compared to other loss making companies. On the face of it we'd posit the share price fall of 5% compound, over three years is well justified by the fundamental deterioration. The key question now is whether the company has the capacity to fund itself to profitability, without more cash. The company will need to return to revenue growth as quickly as possible, if it wants to see some enthusiasm from investors.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

Take a more thorough look at UTour Group's financial health with this free report on its balance sheet.

A Different Perspective

It's nice to see that UTour Group shareholders have received a total shareholder return of 3.5% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 1.1% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand UTour Group better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for UTour Group you should be aware of.

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 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.