No-one enjoys it when they lose money on a stock. But it can difficult to make money in a declining market. Over three years the KAISA Jiayun Technology Inc. (SZSE:300242) share price fell 23%. On the bright side, that's better than the market decline of 28%. And over the last year the share price fell 20%, so we doubt many shareholders are delighted. The last month has also been disappointing, with the stock slipping a further 24%. However, we note the price may have been impacted by the broader market, which is down 13% in the same time period.

With the stock having lost 16% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

KAISA Jiayun Technology isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last three years KAISA Jiayun Technology saw its revenue shrink by 52% per year. That means its revenue trend is very weak compared to other loss making companies. The decline in revenue looks to have disappointed the market, too, with the share price down 7% per year over these difficult three years. That makes us wonder whether the stock may be overvalued, but either way it is worth checking the balance sheet if you're thinking of investing.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

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

While it's never nice to take a loss, KAISA Jiayun Technology shareholders can take comfort that their trailing twelve month loss of 20% wasn't as bad as the market loss of around 24%. Given the total loss of 3% per year over five years, it seems returns have deteriorated in the last twelve months. While some investors do well specializing in buying companies that are struggling (but nonetheless undervalued), don't forget that Buffett said that 'turnarounds seldom turn'. It's always interesting to track share price performance over the longer term. But to understand KAISA Jiayun Technology better, we need to consider many other factors. For example, we've discovered 1 warning sign for KAISA Jiayun Technology that you should be aware of before investing here.

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.