Troy Information Technology (SZSE:300366) dips 7.1% this week as increasing losses might not be inspiring confidence among its investors

It is a pleasure to report that the Troy Information Technology Co., Ltd. (SZSE:300366) is up 55% in the last quarter. But that doesn't change the fact that the returns over the last year have been less than pleasing. After all, the share price is down 33% in the last year, significantly under-performing the market.

If the past week is anything to go by, investor sentiment for Troy Information Technology isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

See our latest analysis for Troy Information Technology

Because Troy Information Technology 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. Shareholders of unprofitable companies usually desire strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Troy Information Technology's revenue didn't grow at all in the last year. In fact, it fell 33%. That looks pretty grim, at a glance. Shareholders have seen the share price drop 33% in that time. That seems pretty reasonable given the lack of both profits and revenue growth. We think most holders must believe revenue growth will improve, or else costs will decline.

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

A Different Perspective

Troy Information Technology shareholders are down 33% for the year, but the market itself is up 4.9%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 3%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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 Troy Information Technology you should know about.

We will like Troy Information 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.