Alpha Professional Holdings Limited (HKG:948) shareholders should be happy to see the share price up 15% in the last quarter. But that is minimal compensation for the share price under-performance over the last year. The cold reality is that the stock has dropped 30% in one year, under-performing the market.
Alpha Professional Holdings wasn’t profitable in the last twelve months, it is unlikely we’ll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn’t make profits, we’d generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Alpha Professional Holdings’s revenue didn’t grow at all in the last year. In fact, it fell 7.4%. That looks pretty grim, at a glance. Shareholders have seen the share price drop 30% in that time. What would you expect when revenue is falling, and it doesn’t make a profit? We think most holders must believe revenue growth will improve, or else costs will decline.
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 Alpha Professional Holdings’s balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Alpha Professional Holdings shareholders are down 30% for the year, even worse than the market loss of 20%. That’s disappointing, but it’s worth keeping in mind that the market-wide selling wouldn’t have helped. It’s great to see a nice little 15% rebound in the last three months. Let’s just hope this isn’t the widely-feared ‘dead cat bounce’ (which would indicate further declines to come). It’s always interesting to track share price performance over the longer term. But to understand Alpha Professional Holdings better, we need to consider many other factors. For example, we’ve discovered 4 warning signs for Alpha Professional Holdings (1 is a bit concerning!) that you should be aware of before investing here.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.
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