The simplest way to benefit from a rising market is to buy an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. That downside risk was realized by Zhejiang Akcome New Energy Technology Co.,Ltd. (SZSE:002610) shareholders over the last year, as the share price declined 42%. That's well below the market decline of 25%. At least the damage isn't so bad if you look at the last three years, since the stock is down 25% in that time. Furthermore, it's down 21% in about a quarter. That's not much fun for holders. But this could be related to the weak market, which is down 15% in the same period.

With the stock having lost 19% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Zhejiang Akcome New Energy TechnologyLtd 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.

Zhejiang Akcome New Energy TechnologyLtd grew its revenue by 26% over the last year. That's definitely a respectable growth rate. Unfortunately that wasn't good enough to stop the share price dropping 42%. You might even wonder if the share price was previously over-hyped. However, that's in the past now, and it's the future that matters most.

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

Take a more thorough look at Zhejiang Akcome New Energy TechnologyLtd's financial health with this free report on its balance sheet.

A Different Perspective

While the broader market lost about 25% in the twelve months, Zhejiang Akcome New Energy TechnologyLtd shareholders did even worse, losing 42%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 0.7%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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. Case in point: We've spotted 2 warning signs for Zhejiang Akcome New Energy TechnologyLtd you should be aware of, and 1 of them is a bit concerning.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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.