Fujian Snowman Group (SZSE:002639) shareholders are up 8.3% this past week, but still in the red over the last three years

It is doubtless a positive to see that the Fujian Snowman Group Co., Ltd. (SZSE:002639) share price has gained some 36% in the last three months. If you look at the last three years, the stock price is down. But that's not so bad when you consider its market is down 17%.

While the last three years has been tough for Fujian Snowman Group shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

See our latest analysis for Fujian Snowman Group

We don't think that Fujian Snowman Group's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

Over the last three years, Fujian Snowman Group's revenue dropped 0.5% per year. That's not what investors generally want to see. The yearly loss of 4% over three years isn't too bad in the scheme of things. The broader market sell-off would have weighed on the stock. But ultimately, given the weak revenue, we'd like to see evidence of imminent profits before we can muster much enthusiasm for this one.

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

This free interactive report on Fujian Snowman Group's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

While the broader market gained around 4.2% in the last year, Fujian Snowman Group shareholders lost 4.8%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 1.3% per year over five years. 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. 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. For instance, we've identified 1 warning sign for Fujian Snowman Group that you should be aware of.

But note: Fujian Snowman Group 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.