Investors in Guangdong Faith Long Crystal TechnologyLTD (SZSE:300460) from three years ago are still down 62%, even after 13% gain this past week

Guangdong Faith Long Crystal Technology Co.,LTD. (SZSE:300460) shareholders should be happy to see the share price up 24% in the last quarter. Meanwhile over the last three years the stock has dropped hard. Regrettably, the share price slid 62% in that period. So it's good to see it climbing back up. While many would remain nervous, there could be further gains if the business can put its best foot forward.

Although the past week has been more reassuring for shareholders, they're still in the red over the last three years, so let's see if the underlying business has been responsible for the decline.

Check out our latest analysis for Guangdong Faith Long Crystal TechnologyLTD

Given that Guangdong Faith Long Crystal TechnologyLTD 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. When a company doesn't make profits, we'd generally hope to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last three years Guangdong Faith Long Crystal TechnologyLTD saw its revenue shrink by 18% per year. That means its revenue trend is very weak compared to other loss making companies. Arguably, the market has responded appropriately to this business performance by sending the share price down 18% (annualized) in the same time period. When revenue is dropping, and losses are still costing, and the share price sinking fast, it's fair to ask if something is remiss. After losing money on a declining business with falling stock price, we always consider whether eager bagholders are still offering us a reasonable exit price.

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

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

The total return of 17% received by Guangdong Faith Long Crystal TechnologyLTD shareholders over the last year isn't far from the market return of -15%. Longer term investors wouldn't be so upset, since they would have made 8%, each year, over five years. If the stock price has been impacted by changing sentiment, rather than deteriorating business conditions, it could spell opportunity. It's always interesting to track share price performance over the longer term. But to understand Guangdong Faith Long Crystal TechnologyLTD better, we need to consider many other factors. Take risks, for example - Guangdong Faith Long Crystal TechnologyLTD has 3 warning signs we think you should be aware of.

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com