Did Changing Sentiment Drive KBS Fashion Group's (NASDAQ:KBSF) Share Price Down A Disastrous 97%?

By
Simply Wall St
Published
June 11, 2020

Some stocks are best avoided. We really hate to see fellow investors lose their hard-earned money. Imagine if you held KBS Fashion Group Limited (NASDAQ:KBSF) for half a decade as the share price tanked 97%. We also note that the stock has performed poorly over the last year, with the share price down 23%. Shareholders have had an even rougher run lately, with the share price down 17% in the last 90 days. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.

While a drop like that is definitely a body blow, money isn't as important as health and happiness.

See our latest analysis for KBS Fashion Group

Given that KBS Fashion Group 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over half a decade KBS Fashion Group reduced its trailing twelve month revenue by 26% for each year. That puts it in an unattractive cohort, to put it mildly. So it's not that strange that the share price dropped 50% per year in that period. We don't think this is a particularly promising picture. Of course, the poor performance could mean the market has been too severe selling down. That can happen.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

NasdaqCM:KBSF Income Statement June 11th 2020

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

A Different Perspective

Investors in KBS Fashion Group had a tough year, with a total loss of 23%, against a market gain of about 14%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. However, the loss over the last year isn't as bad as the 50% per annum loss investors have suffered over the last half decade. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. 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 KBS Fashion Group is showing 3 warning signs in our investment analysis , and 2 of those are a bit concerning...

We will like KBS Fashion Group better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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

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This article by Simply Wall St is general in nature. 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. Thank you for reading.

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