Shareholders in Qtone Education Group (Guangdong)Ltd (SZSE:300359) have lost 20%, as stock drops 11% this past week

Ideally, your overall portfolio should beat the market average. But every investor is virtually certain to have both over-performing and under-performing stocks. So we wouldn't blame long term Qtone Education Group (Guangdong) Co.,Ltd (SZSE:300359) shareholders for doubting their decision to hold, with the stock down 20% over a half decade. The last month has also been disappointing, with the stock slipping a further 24%.

Since Qtone Education Group (Guangdong)Ltd has shed CN¥393m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

View our latest analysis for Qtone Education Group (Guangdong)Ltd

Qtone Education Group (Guangdong)Ltd 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 Qtone Education Group (Guangdong)Ltd saw its revenue shrink by 5.6% per year. While far from catastrophic that is not good. The stock hasn't done well for shareholders in the last five years, falling 4%, annualized. Unfortunately, though, it makes sense given the lack of either profits or revenue growth. Without profits, its hard to see how shareholders win if the revenue keeps falling.

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 Qtone Education Group (Guangdong)Ltd'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 gained around 7.2% in the last year, Qtone Education Group (Guangdong)Ltd shareholders lost 7.3%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 4% per year over five years. 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. You could get a better understanding of Qtone Education Group (Guangdong)Ltd's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

But note: Qtone Education Group (Guangdong)Ltd 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.