Strong week for Vision Values Holdings (HKG:862) shareholders doesn't alleviate pain of five-year loss

By
Simply Wall St
Published
April 29, 2022
SEHK:862
Source: Shutterstock

This week we saw the Vision Values Holdings Limited (HKG:862) share price climb by 12%. But that doesn't change the fact that the returns over the last half decade have been disappointing. The share price has failed to impress anyone , down a sizable 66% during that time. So we're not so sure if the recent bounce should be celebrated. However, in the best case scenario (far from fait accompli), this improved performance might be sustained.

The recent uptick of 12% could be a positive sign of things to come, so let's take a lot at historical fundamentals.

See our latest analysis for Vision Values Holdings

Because Vision Values Holdings 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 expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over five years, Vision Values Holdings grew its revenue at 19% per year. That's better than most loss-making companies. Unfortunately for shareholders the share price has dropped 11% per year - disappointing considering the growth. This could mean high expectations have been tempered, potentially because investors are looking to the bottom line. Given the revenue growth we'd consider the stock to be quite an interesting prospect if the company has a clear path to profitability.

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

earnings-and-revenue-growth
SEHK:862 Earnings and Revenue Growth April 29th 2022

This free interactive report on Vision Values Holdings' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

We regret to report that Vision Values Holdings shareholders are down 39% for the year. Unfortunately, that's worse than the broader market decline of 24%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 11% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand Vision Values Holdings better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Vision Values Holdings (including 1 which is a bit unpleasant) .

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 HK exchanges.

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