Further weakness as SZZT ElectronicsLTD (SZSE:002197) drops 10% this week, taking one-year losses to 61%

SZZT Electronics CO.,LTD (SZSE:002197) shareholders should be happy to see the share price up 18% in the last quarter. But that doesn't change the fact that the returns over the last year have been disappointing. During that time the share price has sank like a stone, descending 61%. Some might say the recent bounce is to be expected after such a bad drop. It may be that the fall was an overreaction.

After losing 10% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

See our latest analysis for SZZT ElectronicsLTD

Given that SZZT ElectronicsLTD didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

SZZT ElectronicsLTD's revenue didn't grow at all in the last year. In fact, it fell 27%. That's not what investors generally want to see. The share price drop of 61% is understandable given the company doesn't have profits to boast of. Having said that, if growth is coming in the future, the stock may have better days ahead. We have a natural aversion to companies that are losing money and shrinking revenue. But perhaps that is being too careful.

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 SZZT ElectronicsLTD's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Investors in SZZT ElectronicsLTD had a tough year, with a total loss of 61%, against a market gain of about 15%. 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 8% 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. 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. For example, we've discovered 1 warning sign for SZZT ElectronicsLTD that you should be aware of before investing here.

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.