This week we saw the Delixi New Energy Technology Co., Ltd. (SHSE:603032) share price climb by 15%. But that's not enough to compensate for the decline over the last twelve months. Like a receding glacier in a warming world, the share price has melted 61% in that period. It's not that amazing to see a bounce after a drop like that. Of course, it could be that the fall was overdone.
The recent uptick of 15% could be a positive sign of things to come, so let's take a look at historical fundamentals.
Because Delixi New Energy Technology 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 hope to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Delixi New Energy Technology's revenue didn't grow at all in the last year. In fact, it fell 46%. That looks pretty grim, at a glance. In the absence of profits, it's not unreasonable that the share price fell 61%. Having said that, if growth is coming in the future, the stock may have better days ahead. We have a natural aversion to companies that are losing money and shrinking revenue. But perhaps that is being too careful.
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 Delixi New Energy Technology's financial health with this free report on its balance sheet.
A Different Perspective
While the broader market lost about 17% in the twelve months, Delixi New Energy Technology shareholders did even worse, losing 61%. 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 5% 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. You could get a better understanding of Delixi New Energy Technology's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
We will like Delixi New Energy Technology better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com