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China Jo-Jo Drugstores' (NASDAQ:CJJD) Shareholders Are Down 18% On Their Shares

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Simply Wall St
·3 min read
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It is a pleasure to report that the China Jo-Jo Drugstores, Inc. (NASDAQ:CJJD) is up 39% in the last quarter. But if you look at the last five years the returns have not been good. After all, the share price is down 18% in that time, significantly under-performing the market.

See our latest analysis for China Jo-Jo Drugstores

Given that China Jo-Jo Drugstores didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last half decade, China Jo-Jo Drugstores saw its revenue increase by 8.4% per year. That's a fairly respectable growth rate. We doubt many shareholders are ok with the fact the share price has fallen 3% each year for half a decade. Clearly, the expectations from back then have not been satisfied. The lesson is that if you buy shares in a money losing company you could end up losing money.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

earnings-and-revenue-growth
earnings-and-revenue-growth

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of China Jo-Jo Drugstores' earnings, revenue and cash flow.

A Different Perspective

Investors in China Jo-Jo Drugstores had a tough year, with a total loss of 17%, against a market gain of about 27%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 3% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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. Even so, be aware that China Jo-Jo Drugstores is showing 4 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.