It hasn't been the best quarter for Hybio Pharmaceutical Co., Ltd. (SZSE:300199) shareholders, since the share price has fallen 26% in that time. But that shouldn't obscure the pleasing returns achieved by shareholders over the last three years. To wit, the share price did better than an index fund, climbing 76% during that period.
Since the long term performance has been good but there's been a recent pullback of 6.7%, let's check if the fundamentals match the share price.
Hybio Pharmaceutical isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last 3 years Hybio Pharmaceutical saw its revenue shrink by 10% per year. The revenue growth might be lacking but the share price has gained 21% each year in that time. If the company is cutting costs profitability could be on the horizon, but the revenue decline is a prima facie concern.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
If you are thinking of buying or selling Hybio Pharmaceutical stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
While it's certainly disappointing to see that Hybio Pharmaceutical shares lost 12% throughout the year, that wasn't as bad as the market loss of 19%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 2% for each year. It could be that the business is just facing some short term problems, but shareholders should keep a close eye on the fundamentals. It's always interesting to track share price performance over the longer term. But to understand Hybio Pharmaceutical better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Hybio Pharmaceutical you should be aware of, and 1 of them is concerning.
We will like Hybio Pharmaceutical 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