Investors in Ucommune International (NASDAQ:UK) from a year ago are still down 86%, even after 42% gain this past week

By
Simply Wall St
Published
December 01, 2021
NasdaqCM:UK
Source: Shutterstock

Ucommune International Ltd (NASDAQ:UK) has rebounded strongly over the last week, with the share price soaring 42%. But that isn't much consolation for the painful drop we've seen in the last year. Indeed, the share price is down a whopping 86% in the last year. Arguably, the recent bounce is to be expected after such a bad drop. The real question is whether the company can turn around its fortunes. While a drop like that is definitely a body blow, money isn't as important as health and happiness.

While the stock has risen 42% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

See our latest analysis for Ucommune International

Because Ucommune International 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last twelve months, Ucommune International increased its revenue by 16%. We think that is pretty nice growth. Unfortunately, the market wanted something better, given it sent the share price 86% lower during the year. It could be that the losses are too much for investors to handle without losing their nerve. We'd posit that the future looks challenging, given the disconnect between revenue growth and the share price.

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:UK Earnings and Revenue Growth December 2nd 2021

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

While Ucommune International shareholders are down 86% for the year, the market itself is up 20%. 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. With the stock down 6.7% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. 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 Ucommune International is showing 4 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

But note: Ucommune International 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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.