Investing in stocks comes with the risk that the share price will fall. And unfortunately for TMSR Holding Company Limited (NASDAQ:TMSR) shareholders, the stock is a lot lower today than it was a year ago. To wit the share price is down 64% in that time. Because TMSR Holding hasn't been listed for many years, the market is still learning about how the business performs. Furthermore, it's down 34% in about a quarter. That's not much fun for holders.
TMSR Holding isn't a profitable company, so it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
TMSR Holding's revenue didn't grow at all in the last year. In fact, it fell 14%. That looks pretty grim, at a glance. In the absence of profits, it's not unreasonable that the share price fell 64%. Fingers crossed this is the low ebb for the stock. We don't generally like to own companies with falling revenues and no profits, so we're pretty cautious of this one, at the moment.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
This free interactive report on TMSR Holding's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
While TMSR Holding shareholders are down 64% for the year, the market itself is up 16%. 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 34% 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. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.
We will like TMSR Holding better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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