Investors Who Bought China Online Education Group (NYSE:COE) Shares A Year Ago Are Now Up 170%

When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the China Online Education Group (NYSE:COE) share price has soared 170% in the last year. Most would be very happy with that, especially in just one year! Also pleasing for shareholders was the 28% gain in the last three months. But this move may well have been assisted by the reasonably buoyant market (up 13% in 90 days). And shareholders have also done well over the long term, with an increase of 118% in the last three years.

View our latest analysis for China Online Education Group

Because China Online Education Group made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

China Online Education Group actually shrunk its revenue over the last year, with a reduction of 43%. We're a little surprised to see the share price pop 170% in the last year. It just goes to show the market doesn't always pay attention to the reported numbers. Of course, it could be that the market expected this revenue drop.

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

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

Pleasingly, China Online Education Group's total shareholder return last year was 170%. That's better than the annualized TSR of 30% over the last three years. Given the track record of solid returns over varying time frames, it might be worth putting China Online Education Group on your watchlist. It's always interesting to track share price performance over the longer term. But to understand China Online Education Group better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with China Online Education Group , and understanding them should be part of your investment process.

Of course China Online Education Group may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.
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