Amidst increasing losses, Investors bid up Toyou Feiji Electronics (SZSE:300302) 9.4% this past week

It's normal to be annoyed when stock you own has a declining share price. But in the short term the market is a voting machine, and the share price movements may not reflect the underlying business performance. The Toyou Feiji Electronics Co., Ltd. (SZSE:300302) share price is down 10% in the last year. But that actually beats the market decline of 11%. On the bright side, the stock is actually up 9.9% in the last three years. But it's up 9.4% in the last week.

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.

View our latest analysis for Toyou Feiji Electronics

Toyou Feiji Electronics isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In just one year Toyou Feiji Electronics saw its revenue fall by 33%. That's not what investors generally want to see. The stock price only fell 10% in that period, not a bad result. So it's fair to say the weak revenue was no surprise to shareholders. It could be interesting to study this stock more closely - when will it generate profits?

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

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

Toyou Feiji Electronics shareholders are down 10% over twelve months, which isn't far from the market return of -11%. Longer term investors wouldn't be so upset, since they would have made 1.1%, each year, over five years. If the stock price has been impacted by changing sentiment, rather than deteriorating business conditions, it could spell opportunity. It's always interesting to track share price performance over the longer term. But to understand Toyou Feiji Electronics better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Toyou Feiji Electronics you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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.