Strong week for Zhejiang RIFA Precision Machinery (SZSE:002520) shareholders doesn't alleviate pain of three-year loss

Zhejiang RIFA Precision Machinery Co., Ltd. (SZSE:002520) shareholders should be happy to see the share price up 22% in the last month. But over the last three years we've seen a quite serious decline. In that time, the share price dropped 51%. Some might say the recent bounce is to be expected after such a bad drop. Perhaps the company has turned over a new leaf.

While the stock has risen 13% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

Check out our latest analysis for Zhejiang RIFA Precision Machinery

Given that Zhejiang RIFA Precision Machinery 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 hope to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

Over three years, Zhejiang RIFA Precision Machinery grew revenue at 0.3% per year. Given it's losing money in pursuit of growth, we are not really impressed with that. This uninspiring revenue growth has no doubt helped send the share price lower; it dropped 15% during the period. It can be well worth keeping an eye on growth stocks that disappoint the market, because sometimes they re-accelerate. After all, growing a business isn't easy, and the process will not always be smooth.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

If you are thinking of buying or selling Zhejiang RIFA Precision Machinery stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We regret to report that Zhejiang RIFA Precision Machinery shareholders are down 24% for the year. Unfortunately, that's worse than the broader market decline of 6.0%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 6% per year over five years. 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. 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. Even so, be aware that Zhejiang RIFA Precision Machinery is showing 2 warning signs in our investment analysis , you should know about...

But note: Zhejiang RIFA Precision Machinery may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.