Yahoo Finance The past year for Kaixin Auto Holdings (NASDAQ:KXIN) investors has not been profitable
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. So spare a thought for the long term shareholders of Kaixin Auto Holdings (NASDAQ:KXIN); the share price is down a whopping 75% in the last twelve months. That'd be enough to make even the strongest stomachs churn. We wouldn't rush to judgement on Kaixin Auto Holdings because we don't have a long term history to look at. The falls have accelerated recently, with the share price down 54% in the last three months. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.
Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.
See our latest analysis for Kaixin Auto Holdings
Kaixin Auto 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. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last year Kaixin Auto Holdings saw its revenue grow by 10,955%. That's a strong result which is better than most other loss making companies. So on the face of it we're really surprised to see the share price down 75% over twelve months. Something weird is definitely impacting the stock price; we'd venture the company has destroyed value somehow. We'd recommend taking a very close look at the stock (and any available forecasts), before considering a purchase, because the share price is not correlated with the revenue growth, that's for sure. Of course, investors do over-react when they are stressed out, so the sell-off could be unjustifiably severe.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
If you are thinking of buying or selling Kaixin Auto Holdings stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Kaixin Auto Holdings shareholders are down 75% for the year, even worse than the market loss of 25%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. The share price decline has continued throughout the most recent three months, down 54%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand Kaixin Auto Holdings better, we need to consider many other factors. For instance, we've identified 2 warning signs for Kaixin Auto Holdings that you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can 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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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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