This week we saw the C-Link Squared Limited (HKG:1463) stock price climbs 14%. But in truth, the past year has not been good for the stock price. After all, the stock price is down 30% in the past year, significantly underperforming the market.
Although last week was more reassuring for shareholders, they are still in the red over the past year, so let’s see if the underlying activity was responsible for the decline.
Check out our latest analysis for C-Link Squared
Since C-Link Squared has made only minimal profits in the past twelve months, we will focus on revenue to assess its business development. Generally, we think this type of company is more comparable to loss-making stocks because the actual profit is so low. It would be hard to believe in a more profitable future without revenue growth.
C-Link Squared increased its revenue by 46% over the past year. That’s certainly a respectable growth rate. At the same time, the share price is down 30% year-over-year, which is disappointing given the progress made. This implies that the market expected better growth. However, that is in the past now, and it is the future that matters most.
The company’s revenues and profits (over time) are shown in the image below (click to see exact figures).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive chart.
A different perspective
C-Link Squared shareholders are down 30% for the year, even worse than the 21% market loss. It’s disappointing, but it’s worth bearing in mind that selling market-wide wouldn’t have helped. With the stock down 0.8% over the past three months, the market doesn’t seem to believe the company has solved all of its problems. Basically, most investors should be wary of buying poorly performing stocks unless the company itself has clearly improved. I find it very interesting to look at stock price over the long term as a proxy for company performance. But to really get insight, we also need to consider other information. Take risks, for example – C-Link Squared has 2 warning signs (and 1 which is potentially serious) that we think you should know about.
If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of companies that have proven they can increase their profits.
Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently trading on HK exchanges.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.