- United States
- Online Retail and Ecommerce
- NasdaqGM:YJ
Investors one-year losses grow to 73% as the stock sheds CN¥64m this past week
- Published
- August 19, 2021
As every investor would know, you don't hit a homerun every time you swing. But it's not unreasonable to try to avoid truly shocking capital losses. We wouldn't blame Yunji Inc. (NASDAQ:YJ) shareholders if they were still in shock after the stock dropped like a lead balloon, down 73% in just one year. A loss like this is a stark reminder that portfolio diversification is important. Yunji may have better days ahead, of course; we've only looked at a one year period. The falls have accelerated recently, with the share price down 61% in the last three months.
After losing 29% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.
Check out our latest analysis for Yunji
Because Yunji 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. 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.
Yunji's revenue didn't grow at all in the last year. In fact, it fell 54%. That looks like a train-wreck result to investors far and wide. If you need more proof of that, check the share price. (Hint: it tanked 73%). Our mindset doesn't have a lot of time for stocks like this. A healthy aversion to bagholding (holding potentially worthless stocks) sees many shareholders avoid buying shares like this, rightly or wrongly.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
This free interactive report on Yunji's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Given that the market gained 32% in the last year, Yunji shareholders might be miffed that they lost 73%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 61% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Yunji you should know about.
But note: Yunji 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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