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Even the best stock pickers will make plenty of bad investments. Anyone who held Chindata Group Holdings Limited (NASDAQ:CD) over the last year knows what a loser feels like. In that relatively short period, the share price has plunged 51%. Chindata Group Holdings may have better days ahead, of course; we've only looked at a one year period. Furthermore, it's down 45% in about a quarter. That's not much fun for holders.
With the stock having lost 17% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.
Because Chindata Group Holdings made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Chindata Group Holdings grew its revenue by 63% over the last year. That's well above most other pre-profit companies. In contrast the share price is down 51% over twelve months. Yes, the market can be a fickle mistress. This could mean hype has come out of the stock because the bottom line is concerning investors. We'd definitely consider it a positive if the company is trending towards profitability. If you can see that happening, then perhaps consider adding this stock to your watchlist.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
While Chindata Group Holdings shareholders are down 51% for the year, the market itself is up 31%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. With the stock down 45% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Chindata Group Holdings is showing 1 warning sign in our investment analysis , you should know about...
But note: Chindata Group Holdings 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).
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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
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