Even after rising 17% this past week, Concord Medical Services Holdings (NYSE:CCM) shareholders are still down 62% over the past five years

By
Simply Wall St
Published
May 12, 2022
NYSE:CCM
Source: Shutterstock

This week we saw the Concord Medical Services Holdings Limited (NYSE:CCM) share price climb by 17%. But that doesn't change the fact that the returns over the last half decade have been disappointing. In that time the share price has delivered a rude shock to holders, who find themselves down 62% after a long stretch. So is the recent increase sufficient to restore confidence in the stock? Not yet. Of course, this could be the start of a turnaround.

On a more encouraging note the company has added CN¥10.0m to its market cap in just the last 7 days, so let's see if we can determine what's driven the five-year loss for shareholders.

See our latest analysis for Concord Medical Services Holdings

Concord Medical Services Holdings 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over half a decade Concord Medical Services Holdings reduced its trailing twelve month revenue by 4.4% for each year. While far from catastrophic that is not good. With neither profit nor revenue growth, the loss of 10% per year doesn't really surprise us. We don't think anyone is rushing to buy this stock. Not that many investors like to invest in companies that are losing money and not growing revenue.

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

earnings-and-revenue-growth
NYSE:CCM Earnings and Revenue Growth May 12th 2022

If you are thinking of buying or selling Concord Medical Services Holdings stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While the broader market lost about 9.4% in the twelve months, Concord Medical Services Holdings shareholders did even worse, losing 51%. 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 10% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - Concord Medical Services Holdings has 4 warning signs (and 2 which shouldn't be ignored) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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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