Loss-making Langold Real Estate (SZSE:002305) has seen earnings and shareholder returns follow the same downward trajectory over past -33%

Langold Real Estate Co., Ltd. (SZSE:002305) shareholders should be happy to see the share price up 11% in the last week. But that doesn't change the reality of under-performance over the last twelve months. After all, the share price is down 33% in the last year, significantly under-performing the market.

Although the past week has been more reassuring for shareholders, they're still in the red over the last year, so let's see if the underlying business has been responsible for the decline.

See our latest analysis for Langold Real Estate

Because Langold Real Estate 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Langold Real Estate's revenue didn't grow at all in the last year. In fact, it fell 89%. That looks like a train-wreck result to investors far and wide. No surprise, then, that the share price fell 33% over the year. We would want to see improvements in the core business, and diminishing losses, before getting too excited about this one.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

This free interactive report on Langold Real Estate'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 lost about 18% in the twelve months, Langold Real Estate shareholders did even worse, losing 33%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 5% over the last half decade. 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. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Langold Real Estate you should know about.

We will like Langold Real Estate better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider 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.