Investors in T ScientificLtd (KOSDAQ:057680) from three years ago are still down 65%, even after 17% gain this past week

T Scientific Co.,Ltd. (KOSDAQ:057680) shareholders will doubtless be very grateful to see the share price up 33% in the last quarter. Meanwhile over the last three years the stock has dropped hard. Tragically, the share price declined 65% in that time. So the improvement may be a real relief to some. The rise has some hopeful, but turnarounds are often precarious.

On a more encouraging note the company has added ₩12b to its market cap in just the last 7 days, so let's see if we can determine what's driven the three-year loss for shareholders.

View our latest analysis for T ScientificLtd

T ScientificLtd 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 it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Over three years, T ScientificLtd grew revenue at 61% per year. That's well above most other pre-profit companies. The share price has moved in quite the opposite direction, down 18% over that time, a bad result. This could mean hype has come out of the stock because the losses are concerning investors. But a share price drop of that magnitude could well signal that the market is overly negative on the stock.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

Take a more thorough look at T ScientificLtd's financial health with this free report on its balance sheet.

A Different Perspective

While the broader market lost about 0.003% in the twelve months, T ScientificLtd shareholders did even worse, losing 23%. 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 4% 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 T ScientificLtd better, we need to consider many other factors. Even so, be aware that T ScientificLtd is showing 3 warning signs in our investment analysis , and 2 of those can't be ignored...

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.