Investors are selling off HLB bioStepLtd (KOSDAQ:278650), lack of profits no doubt contribute to shareholders one-year loss

Investing in stocks comes with the risk that the share price will fall. And unfortunately for HLB bioStep Co.,Ltd. (KOSDAQ:278650) shareholders, the stock is a lot lower today than it was a year ago. To wit the share price is down 56% in that time. To make matters worse, the returns over three years have also been really disappointing (the share price is 53% lower than three years ago). Even worse, it's down 29% in about a month, which isn't fun at all.

If the past week is anything to go by, investor sentiment for HLB bioStepLtd isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

HLB bioStepLtd wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In just one year HLB bioStepLtd saw its revenue fall by 9.7%. That looks pretty grim, at a glance. In the absence of profits, it's not unreasonable that the share price fell 56%. Fingers crossed this is the low ebb for the stock. We don't generally like to own companies with falling revenues and no profits, so we're pretty cautious of this one, at the moment.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

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

A Different Perspective

While the broader market lost about 5.4% in the twelve months, HLB bioStepLtd shareholders did even worse, losing 56%. 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. Longer term investors wouldn't be so upset, since they would have made 3%, each year, over five years. 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that HLB bioStepLtd is showing 1 warning sign in our investment analysis , you should know about...

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on South Korean exchanges.

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

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.