The one-year returns have been solid for China Xiangtai Food (NASDAQ:PLIN) shareholders despite underlying losses increasing

By
Simply Wall St
Published
November 25, 2021
NasdaqCM:PLIN
Source: Shutterstock

Unfortunately, investing is risky - companies can and do go bankrupt. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! Take, for example China Xiangtai Food Co., Ltd. (NASDAQ:PLIN). Its share price is already up an impressive 128% in the last twelve months. And in the last month, the share price has gained 95%. We note that China Xiangtai Food reported its financial results recently; luckily, you can catch up on the latest revenue and profit numbers in our company report. We'll need to follow China Xiangtai Food for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

The past week has proven to be lucrative for China Xiangtai Food investors, so let's see if fundamentals drove the company's one-year performance.

View our latest analysis for China Xiangtai Food

Given that China Xiangtai Food 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. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last twelve months, China Xiangtai Food's revenue grew by 232%. That's well above most other pre-profit companies. Meanwhile, the market has paid attention, sending the share price soaring 128% in response. That sort of revenue growth is bound to attract attention, even if the company doesn't turn a profit. The strong share price rise indicates optimism, so there may be a better opportunity for buyers as the hype fades a bit.

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

earnings-and-revenue-growth
NasdaqCM:PLIN Earnings and Revenue Growth November 25th 2021

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. This free interactive report on China Xiangtai Food's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

China Xiangtai Food shareholders should be happy with the total gain of 128% over the last twelve months. And the share price momentum remains respectable, with a gain of 42% in the last three months. This suggests the company is continuing to win over new investors. It's always interesting to track share price performance over the longer term. But to understand China Xiangtai Food better, we need to consider many other factors. To that end, you should learn about the 6 warning signs we've spotted with China Xiangtai Food (including 3 which are significant) .

But note: China Xiangtai Food may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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

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.

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Simply Wall St

Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.