Piesat Information Technology (SHSE:688066 shareholders incur further losses as stock declines 13% this week, taking three-year losses to 62%

If you love investing in stocks you're bound to buy some losers. But the last three years have been particularly tough on longer term Piesat Information Technology Co., Ltd. (SHSE:688066) shareholders. Sadly for them, the share price is down 62% in that time. And over the last year the share price fell 34%, so we doubt many shareholders are delighted. The last week also saw the share price slip down another 13%.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

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Piesat Information 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. 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 the last three years Piesat Information Technology saw its revenue shrink by 2.3% per year. That is not a good result. The share price decline of 18% compound, over three years, is understandable given the company doesn't have profits to boast of, and revenue is moving in the wrong direction. Of course, it's the future that will determine whether today's price is a good one. We'd be pretty wary of this one until it makes a profit, because we don't specialize in finding turnaround situations.

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 Piesat Information Technology's financial health with this free report on its balance sheet.

A Different Perspective

Piesat Information Technology shareholders are down 34% for the year, but the market itself is up 14%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 6% 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 Piesat Information Technology better, we need to consider many other factors. Take risks, for example - Piesat Information Technology has 1 warning sign we think you should be aware of.

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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.