Dong Yi Ri Sheng Home Decoration GroupLtd (SZSE:002713 shareholders incur further losses as stock declines 23% this week, taking five-year losses to 74%

Some stocks are best avoided. We don't wish catastrophic capital loss on anyone. Anyone who held Dong Yi Ri Sheng Home Decoration Group Co.,Ltd. (SZSE:002713) for five years would be nursing their metaphorical wounds since the share price dropped 74% in that time. And it's not just long term holders hurting, because the stock is down 74% in the last year. The falls have accelerated recently, with the share price down 55% in the last three months.

If the past week is anything to go by, investor sentiment for Dong Yi Ri Sheng Home Decoration GroupLtd isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

See our latest analysis for Dong Yi Ri Sheng Home Decoration GroupLtd

Dong Yi Ri Sheng Home Decoration GroupLtd 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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 the last five years Dong Yi Ri Sheng Home Decoration GroupLtd saw its revenue shrink by 6.5% per year. While far from catastrophic that is not good. The share price fall of 12% (per year, over five years) is a stern reminder that money-losing companies are expected to grow revenue. We're generally averse to companies with declining revenues, but we're not alone in that. That is not really what the successful investors we know aim for.

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

Take a more thorough look at Dong Yi Ri Sheng Home Decoration GroupLtd's financial health with this free report on its balance sheet.

A Different Perspective

While the broader market lost about 17% in the twelve months, Dong Yi Ri Sheng Home Decoration GroupLtd shareholders did even worse, losing 74%. 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 12% 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. It's always interesting to track share price performance over the longer term. But to understand Dong Yi Ri Sheng Home Decoration GroupLtd better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Dong Yi Ri Sheng Home Decoration GroupLtd .

But note: Dong Yi Ri Sheng Home Decoration GroupLtd 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.

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