Yahoo Finance Shareholders in Boqii Holding (NYSE:BQ) are in the red if they invested a year ago
The art and science of stock market investing requires a tolerance for losing money on some of the shares you buy. But it would be foolish to simply accept every extremely large loss as an inevitable part of the game. So we hope that those who held Boqii Holding Limited (NYSE:BQ) during the last year don't lose the lesson, in addition to the 73% hit to the value of their shares. That'd be a striking reminder about the importance of diversification. Boqii Holding may have better days ahead, of course; we've only looked at a one year period. Shareholders have had an even rougher run lately, with the share price down 41% in the last 90 days.
Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns.
Check out our latest analysis for Boqii Holding
Boqii Holding 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. When a company doesn't make profits, we'd generally expect to see good 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 year Boqii Holding saw its revenue grow by 34%. We think that is pretty nice growth. Unfortunately, the market wanted something better, given it sent the share price 73% lower during the year. It could be that the losses are too much for investors to handle without losing their nerve. It seems that the market has concerns about the future, because that share price action does not seem to reflect the revenue growth at all.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
This free interactive report on Boqii Holding'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 27% in the last year, Boqii Holding 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. The share price decline has continued throughout the most recent three months, down 41%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. 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. Take risks, for example - Boqii Holding has 3 warning signs (and 1 which can't be ignored) we think you should know about.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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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