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Investing in stocks comes with the risk that the share price will fall. And unfortunately for Wan Cheng Metal Packaging Company Limited (HKG:8291) shareholders, the stock is a lot lower today than it was a year ago. In that relatively short period, the share price has plunged 59%. Wan Cheng Metal Packaging hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. The falls have accelerated recently, with the share price down 29% in the last three months.
See our latest analysis for Wan Cheng Metal Packaging
Wan Cheng Metal Packaging 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Wan Cheng Metal Packaging's revenue didn't grow at all in the last year. In fact, it fell 12%. That looks pretty grim, at a glance. The share price drop of 59% is understandable given the company doesn't have profits to boast of. Having said that, if growth is coming in the future, the stock may have better days ahead. We have a natural aversion to companies that are losing money and shrinking revenue. But perhaps that is being too careful.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Dive deeper into the earnings by checking this interactive graph of Wan Cheng Metal Packaging's earnings, revenue and cash flow.
A Different Perspective
We doubt Wan Cheng Metal Packaging shareholders are happy with the loss of 59% over twelve months. That falls short of the market, which lost 5.4%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. The share price decline has continued throughout the most recent three months, down 29%, 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. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.