Puxin (NYSE:NEW) Share Prices Have Dropped 64% In The Last Year

Investing in stocks comes with the risk that the share price will fall. And unfortunately for Puxin Limited (NYSE:NEW) shareholders, the stock is a lot lower today than it was a year ago. The share price has slid 64% in that time. Because Puxin hasn't been listed for many years, the market is still learning about how the business performs. In the last ninety days we've seen the share price slide 72%. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.

View our latest analysis for Puxin

Puxin 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. 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.

Puxin's revenue didn't grow at all in the last year. In fact, it fell 6.5%. That looks pretty grim, at a glance. In the absence of profits, it's not unreasonable that the share price fell 64%. Having said that, if growth is coming in the future, the stock may have better days ahead. We have a natural aversion to companies that are losing money and shrinking revenue. But perhaps that is being too careful.

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

Take a more thorough look at Puxin's financial health with this free report on its balance sheet.

A Different Perspective

Given that the market gained 48% in the last year, Puxin shareholders might be miffed that they lost 64%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. It's worth noting that the last three months did the real damage, with a 72% decline. This probably signals that the business has recently disappointed shareholders - it will take time to win them back. 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 Puxin is showing 1 warning sign in our investment analysis , you should know about...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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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