The simplest way to benefit from a rising market is to buy an index fund. But if you buy individual stocks, you can do both better or worse than that. Unfortunately the CooTek (Cayman) Inc. (NYSE:CTK) share price slid 35% over twelve months. That contrasts poorly with the market return of 23%. CooTek (Cayman) may have better days ahead, of course; we've only looked at a one year period. It's down 42% in about a month. Importantly, this could be a market reaction to the recently released financial results. You can check out the latest numbers in our company report.
Given that CooTek (Cayman) 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
CooTek (Cayman) grew its revenue by 161% over the last year. That's a strong result which is better than most other loss making companies. The share price drop of 35% over twelve months would be considered disappointing by many, so you might argue the company is getting little credit for its impressive revenue growth. On the bright side, if this company is moving profits in the right direction, top-line growth like that could be an opportunity. Our monkey brains haven't evolved to think exponentially, so humans do tend to underestimate companies that have exponential growth.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
While CooTek (Cayman) shareholders are down 35% for the year, the market itself is up 23%. 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. It's worth noting that the last three months did the real damage, with a 37% decline. This probably signals that the business has recently disappointed shareholders - it will take time to win them back. It's always interesting to track share price performance over the longer term. But to understand CooTek (Cayman) better, we need to consider many other factors. Take risks, for example - CooTek (Cayman) has 1 warning sign we think you should be aware of.
But note: CooTek (Cayman) 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. 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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