It is doubtless a positive to see that the L & A International Holdings Limited (HKG:8195) share price has gained some 60% in the last three months. But the last three years have seen a terrible decline. To wit, the share price sky-dived 99% in that time. So we're relieved for long term holders to see a bit of uplift. But the more important question is whether the underlying business can justify a higher price still.

While a drop like that is definitely a body blow, money isn't as important as health and happiness.

See our latest analysis for L & A International Holdings

L & A International Holdings isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong 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.

Over the last three years, L & A International Holdings's revenue dropped 51% per year. That's definitely a weaker result than most pre-profit companies report. The swift share price decline at an annual compound rate of 83%, reflects this weak fundamental performance. We prefer leave it to clowns to try to catch falling knives, like this stock. It's worth remembering that investors call buying a steeply falling share price 'catching a falling knife' because it is a dangerous pass time.

You can see how revenue and earnings have changed over time in the image below, (click on the chart to see cashflow).

If you are thinking of buying or selling L & A International Holdings stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's nice to see that L & A International Holdings shareholders have gained 10% (in total) over the last year. This recent result is much better than the 83% drop suffered by shareholders each year (on average) over the last three. The optimist would say this is evidence that the stock has bottomed, and better days lie ahead. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

Of course L & A International Holdings may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.