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Investors can approximate the average market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Investors in Qeeka Home (Cayman) Inc. (HKG:1739) have tasted that bitter downside in the last year, as the share price dropped 36%. That's well bellow the market return of -6.6%. Because Qeeka Home (Cayman) hasn't been listed for many years, the market is still learning about how the business performs. Shareholders have had an even rougher run lately, with the share price down 17% in the last 90 days. However, one could argue that the price has been influenced by the general market, which is down 7.6% in the same timeframe.
Check out our latest analysis for Qeeka Home (Cayman)
While Qeeka Home (Cayman) made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.
In the last twelve months, Qeeka Home (Cayman) increased its revenue by 34%. We think that is pretty nice growth. Unfortunately that wasn't good enough to stop the share price dropping 36%. You might even wonder if the share price was previously over-hyped. But if revenue keeps growing, then at a certain point the share price would likely follow.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
If you are thinking of buying or selling Qeeka Home (Cayman) stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
We doubt Qeeka Home (Cayman) shareholders are happy with the loss of 36% over twelve months. That falls short of the market, which lost 6.6%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. With the stock down 17% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. Before spending more time on Qeeka Home (Cayman) it might be wise to click here to see if insiders have been buying or selling shares.
But note: Qeeka Home (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).