Investing in stocks comes with the risk that the share price will fall. Unfortunately, shareholders of KE Holdings Inc. (NYSE:BEKE) have suffered share price declines over the last year. In that relatively short period, the share price has plunged 67%. KE Holdings hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time.
The recent uptick of 6.3% could be a positive sign of things to come, so let's take a lot at historical fundamentals.
While KE Holdings made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.
In the last twelve months, KE Holdings increased its revenue by 38%. That's definitely a respectable growth rate. Unfortunately it seems investors wanted more, because the share price is down 67% in that time. It is of course possible that the business will still deliver strong growth, it will just take longer than expected to do it. For us it's important to consider when you think a company will become profitable, if you're basing your valuation on revenue.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
KE Holdings is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
While KE Holdings shareholders are down 67% for the year, the market itself is up 21%. 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. Putting aside the last twelve months, it's good to see the share price has rebounded by 8.4%, in the last ninety days. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). You could get a better understanding of KE Holdings' growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
But note: KE Holdings 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.
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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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