Loss-making Sugentech (KOSDAQ:253840) has seen earnings and shareholder returns follow the same downward trajectory over past -53%

It is doubtless a positive to see that the Sugentech Inc. (KOSDAQ:253840) share price has gained some 31% in the last three months. But over the last three years we've seen a quite serious decline. Indeed, the share price is down a tragic 54% in the last three years. So it's good to see it climbing back up. After all, could be that the fall was overdone.

While the stock has risen 12% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

Check out our latest analysis for Sugentech

Sugentech 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. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last three years Sugentech saw its revenue shrink by 55% 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 16% (annualized) in the same time period. Bagholders or 'baggies' are people who buy more of a stock as the price collapses. They are then left 'holding the bag' if the shares turn out to be worthless. It could be a while before the company repays long suffering shareholders with share price gains.

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

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

A Different Perspective

Sugentech provided a TSR of 1.2% over the last twelve months. Unfortunately this falls short of the market return. If we look back over five years, the returns are even better, coming in at 2% per year for five years. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. 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. Even so, be aware that Sugentech is showing 3 warning signs in our investment analysis , and 1 of those is significant...

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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.