Shareholders in T-Robotics.Co.Ltd (KOSDAQ:117730) have lost 78%, as stock drops 14% this past week

It's not a secret that every investor will make bad investments, from time to time. But it would be foolish to simply accept every extremely large loss as an inevitable part of the game. We wouldn't blame T-Robotics.Co.,Ltd. (KOSDAQ:117730) shareholders if they were still in shock after the stock dropped like a lead balloon, down 78% in just one year. A loss like this is a stark reminder that portfolio diversification is important. The silver lining (for longer term investors) is that the stock is still 4.2% higher than it was three years ago. The falls have accelerated recently, with the share price down 45% in the last three months. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.

Since T-Robotics.Co.Ltd has shed ₩23b 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 T-Robotics.Co.Ltd

Given that T-Robotics.Co.Ltd 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 twelve months, T-Robotics.Co.Ltd increased its revenue by 100%. That's well above most other pre-profit companies. So the hefty 78% share price crash makes us think the company has somehow offended market participants. Something weird is definitely impacting the stock price; we'd venture the company has destroyed value somehow. We'd recommend taking a very close look at the stock (and any available forecasts), before considering a purchase, because the share price is not correlated with the revenue growth, that's for sure. Of course, markets do over-react so share price drop may be too harsh.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

While the broader market lost about 0.5% in the twelve months, T-Robotics.Co.Ltd shareholders did even worse, losing 78%. 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. On the bright side, long term shareholders have made money, with a gain of 9% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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. For example, we've discovered 3 warning signs for T-Robotics.Co.Ltd (2 can't be ignored!) that you should be aware of before investing here.

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 South Korean 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.