Lootom Telcovideo Network (wuxi) (SZSE:300555) five-year losses have grown faster than shareholder returns have fallen, but the stock jumps 11% this past week

It is a pleasure to report that the Lootom Telcovideo Network (wuxi) Co., Ltd. (SZSE:300555) is up 43% in the last quarter. But that doesn't change the fact that the returns over the last five years have been less than pleasing. You would have done a lot better buying an index fund, since the stock has dropped 11% in that half decade.

On a more encouraging note the company has added CN¥166m to its market cap in just the last 7 days, so let's see if we can determine what's driven the five-year loss for shareholders.

See our latest analysis for Lootom Telcovideo Network (wuxi)

Because Lootom Telcovideo Network (wuxi) made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually desire strong revenue growth. 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.

Over half a decade Lootom Telcovideo Network (wuxi) reduced its trailing twelve month revenue by 7.9% for each year. While far from catastrophic that is not good. The stock hasn't done well for shareholders in the last five years, falling 2%, annualized. But it doesn't surprise given the falling revenue. Without profits, its hard to see how shareholders win if the revenue keeps falling.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Take a more thorough look at Lootom Telcovideo Network (wuxi)'s financial health with this free report on its balance sheet.

A Different Perspective

While the broader market gained around 9.8% in the last year, Lootom Telcovideo Network (wuxi) shareholders lost 2.0%. 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, longer term shareholders are suffering worse, given the loss of 2% doled out over the last five years. We'd need to see some sustained improvements in the key metrics before we could muster much enthusiasm. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Lootom Telcovideo Network (wuxi) you should know about.

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.