Joyware ElectronicsLtd (SZSE:300270 shareholders incur further losses as stock declines 13% this week, taking one-year losses to 27%

Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. For example, the Joyware Electronics Co.,Ltd (SZSE:300270) share price is down 27% in the last year. That falls noticeably short of the market decline of around 13%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 21% in three years. On top of that, the share price is down 13% in the last week.

Since Joyware ElectronicsLtd has shed CN¥266m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

See our latest analysis for Joyware ElectronicsLtd

Joyware ElectronicsLtd 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. 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 just one year Joyware ElectronicsLtd saw its revenue fall by 62%. That looks like a train-wreck result to investors far and wide. Meanwhile, the share price dropped by 27%. We would want to see improvements in the core business, and diminishing losses, before getting too excited about this one.

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

If you are thinking of buying or selling Joyware ElectronicsLtd stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While the broader market lost about 13% in the twelve months, Joyware ElectronicsLtd shareholders did even worse, losing 27%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 3% 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. It's always interesting to track share price performance over the longer term. But to understand Joyware ElectronicsLtd better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Joyware ElectronicsLtd .

We will like Joyware ElectronicsLtd 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.