Generally speaking long term investing is the way to go. But no-one is immune from buying too high. To wit, the Gome Finance Technology Co., Ltd. (HKG:628) share price managed to fall 62% over five long years. That’s an unpleasant experience for long term holders. Furthermore, it’s down 10% in about a quarter. That’s not much fun for holders. Of course, this share price action may well have been influenced by the 8.6% decline in the broader market, throughout the period.
Check out our latest analysis for Gome Finance Technology
Given that Gome Finance Technology didn’t make a profit in the last twelve months, we’ll focus on revenue growth to form a quick view of its business development. When a company doesn’t make profits, we’d generally expect to see good revenue growth. That’s because it’s hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Over five years, Gome Finance Technology grew its revenue at 21% per year. That’s better than most loss-making companies. In contrast, the share price is has averaged a loss of 18% per year – that’s quite disappointing. This could mean high expectations have been tempered, potentially because investors are looking to the bottom line. Given the revenue growth we’d consider the stock to be quite an interesting prospect if the company has a clear path to profitability.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
This free interactive report on Gome Finance Technology’s balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
We regret to report that Gome Finance Technology shareholders are down 20% for the year. Unfortunately, that’s worse than the broader market decline of 7.2%. 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 18% over the last half decade. We realise that Baron Rothschild has said investors should “buy when there is blood on the streets”, but we caution that investors should first be sure they are buying a high quality business. It’s always interesting to track share price performance over the longer term. But to understand Gome Finance Technology better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we’ve spotted with Gome Finance Technology .
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 HK exchanges.
If you spot an error that warrants correction, please contact the editor at [email protected] This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.