Yorhe Fluid Intelligent Control (SZSE:002795) dips 12% this week as increasing losses might not be inspiring confidence among its investors

It is doubtless a positive to see that the Yorhe Fluid Intelligent Control Co., Ltd. (SZSE:002795) share price has gained some 47% in the last three months. But in truth the last year hasn't been good for the share price. After all, the share price is down 39% in the last year, significantly under-performing the market.

After losing 12% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

View our latest analysis for Yorhe Fluid Intelligent Control

Because Yorhe Fluid Intelligent Control made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually desire strong 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.

In just one year Yorhe Fluid Intelligent Control saw its revenue fall by 10%. That's not what investors generally want to see. The stock price has languished lately, falling 39% in a year. What would you expect when revenue is falling, and it doesn't make a profit? It's hard to escape the conclusion that buyers must envision either growth down the track, cost cutting, or both.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. It might be well worthwhile taking a look at our free report on Yorhe Fluid Intelligent Control's earnings, revenue and cash flow.

A Different Perspective

While the broader market gained around 14% in the last year, Yorhe Fluid Intelligent Control shareholders lost 39%. 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 6% 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. It's always interesting to track share price performance over the longer term. But to understand Yorhe Fluid Intelligent Control better, we need to consider many other factors. For instance, we've identified 1 warning sign for Yorhe Fluid Intelligent Control that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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.