GCL System Integration Technology (SZSE:002506) earnings and shareholder returns have been trending downwards for the last five years, but the stock jumps 12% this past week

It is doubtless a positive to see that the GCL System Integration Technology Co., Ltd. (SZSE:002506) share price has gained some 70% in the last three months. But if you look at the last five years the returns have not been good. After all, the share price is down 49% in that time, significantly under-performing the market.

On a more encouraging note the company has added CN¥2.0b to its market cap in just the last 7 days, so let's see if we can determine what's driven the five-year loss for shareholders.

Check out our latest analysis for GCL System Integration Technology

We don't think that GCL System Integration Technology'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. It would be hard to believe in a more profitable future without growing revenues.

In the last half decade, GCL System Integration Technology saw its revenue increase by 23% per year. That's better than most loss-making companies. Shareholders are no doubt disappointed with the loss of 8%, each year, in that time. You could say that the market has been harsh, given the top line growth. So now is probably an apt time to look closer at the stock, if you think it has potential.

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

We know that GCL System Integration Technology has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at GCL System Integration Technology's financial health with this free report on its balance sheet.

A Different Perspective

It's good to see that GCL System Integration Technology has rewarded shareholders with a total shareholder return of 17% in the last twelve months. Notably the five-year annualised TSR loss of 8% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. 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. To that end, you should be aware of the 2 warning signs we've spotted with GCL System Integration Technology .

We will like GCL System Integration Technology 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.