Increasing losses over year doesn't faze Kingsoft Cloud Holdings (NASDAQ:KC) investors as stock swells 22% this past week
This month, we saw the Kingsoft Cloud Holdings Limited (NASDAQ:KC) up an impressive 40%. But that is meagre solace when you consider how the price has plummeted over the last year. Specifically, the stock price nose-dived 89% in that time. It's not uncommon to see a bounce after a drop like that. The important thing is whether the company can turn it around, longer term. While a drop like that is definitely a body blow, money isn't as important as health and happiness.
On a more encouraging note the company has added CN¥117m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.
View our latest analysis for Kingsoft Cloud Holdings
Kingsoft Cloud Holdings isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
In the last twelve months, Kingsoft Cloud Holdings increased its revenue by 20%. That's definitely a respectable growth rate. Unfortunately, the market wanted something better, given it sent the share price 89% lower during the year. One fear might be that the company might be losing too much money and will need to raise more. It seems that the market has concerns about the future, because that share price action does not seem to reflect the revenue growth at all.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
Take a more thorough look at Kingsoft Cloud Holdings' financial health with this free report on its balance sheet.
A Different Perspective
Kingsoft Cloud Holdings shareholders are down 89% for the year, even worse than the market loss of 21%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. The share price decline has continued throughout the most recent three months, down 23%, 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. It's always interesting to track share price performance over the longer term. But to understand Kingsoft Cloud Holdings better, we need to consider many other factors. Even so, be aware that Kingsoft Cloud Holdings is showing 3 warning signs in our investment analysis , you should know about...
We will like Kingsoft Cloud Holdings 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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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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