The one-year returns have been strong for Shenzhen Zowee Technology (SZSE:002369) shareholders despite underlying losses increasing

Unless you borrow money to invest, the potential losses are limited. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the Shenzhen Zowee Technology Co., Ltd. (SZSE:002369) share price had more than doubled in just one year - up 144%. And in the last week the share price has popped 20%. However, the longer term returns haven't been so impressive, with the stock up just 13% in the last three years.

After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.

See our latest analysis for Shenzhen Zowee Technology

Shenzhen Zowee Technology isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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.

Shenzhen Zowee Technology grew its revenue by 6.1% last year. That's not great considering the company is losing money. So we wouldn't have expected the share price to rise by 144%. We're happy that investors have made money, though we wonder if the increase will be sustained. We're not so sure that revenue growth is driving the market optimism about the stock.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

We're pleased to report that Shenzhen Zowee Technology shareholders have received a total shareholder return of 144% over one year. There's no doubt those recent returns are much better than the TSR loss of 4% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Shenzhen Zowee Technology better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Shenzhen Zowee Technology you should be aware of.

Of course Shenzhen Zowee Technology may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.