Cubic Digital TechnologyLtd (SZSE:300344) adds CN¥648m to market cap in the past 7 days, though investors from three years ago are still down 32%

While not a mind-blowing move, it is good to see that the Cubic Digital Technology Co.,Ltd. (SZSE:300344) share price has gained 28% in the last three months. But that doesn't help the fact that the three year return is less impressive. Truth be told the share price declined 32% in three years and that return, Dear Reader, falls short of what you could have got from passive investing with an index fund.

The recent uptick of 24% could be a positive sign of things to come, so let's take a look at historical fundamentals.

View our latest analysis for Cubic Digital TechnologyLtd

Cubic Digital TechnologyLtd 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last three years Cubic Digital TechnologyLtd saw its revenue shrink by 36% per year. That's definitely a weaker result than most pre-profit companies report. With revenue in decline, the share price decline of 10% per year is hardly undeserved. The key question now is whether the company has the capacity to fund itself to profitability, without more cash. Of course, it is possible for businesses to bounce back from a revenue drop - but we'd want to see that before getting interested.

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 Cubic Digital TechnologyLtd stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Cubic Digital TechnologyLtd provided a TSR of 0.6% over the last twelve months. But that return falls short of the market. But at least that's still a gain! Over five years the TSR has been a reduction of 0.9% per year, over five years. So this might be a sign the business has turned its fortunes around. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 1 warning sign for Cubic Digital TechnologyLtd that you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

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.