Strong week for Wuxi Xuelang Environmental Technology (SZSE:300385) shareholders doesn't alleviate pain of three-year loss

Wuxi Xuelang Environmental Technology Co., Ltd. (SZSE:300385) shareholders should be happy to see the share price up 21% in the last month. Meanwhile over the last three years the stock has dropped hard. Indeed, the share price is down a tragic 61% in the last three years. So the improvement may be a real relief to some. Perhaps the company has turned over a new leaf.

While the last three years has been tough for Wuxi Xuelang Environmental Technology 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.

View our latest analysis for Wuxi Xuelang Environmental Technology

Wuxi Xuelang Environmental Technology 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 hope to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last three years Wuxi Xuelang Environmental Technology saw its revenue shrink by 13% per year. That's not what investors generally want to see. With revenue in decline, and profit but a dream, we can understand why the share price has been declining at 17% per year. Having said that, if growth is coming in the future, now may be the low ebb for the company. We don't generally like to own companies that lose money and can't grow revenues. But any company is worth looking at when it makes a maiden profit.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

This free interactive report on Wuxi Xuelang Environmental 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 Wuxi Xuelang Environmental Technology shareholders are down 38% for the year. Unfortunately, that's worse than the broader market decline of 17%. 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 9% over the last half decade. 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 Wuxi Xuelang Environmental Technology better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Wuxi Xuelang Environmental Technology (including 1 which shouldn't be ignored) .

If you are like me, then you will not want to miss this free list of undervalued small caps 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 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.