Investors in RLX Technology (NYSE:RLX) have unfortunately lost 23% over the last year
RLX Technology Inc. (NYSE:RLX) shareholders will doubtless be very grateful to see the share price up 170% in the last quarter. But that doesn't change the reality of under-performance over the last twelve months. The cold reality is that the stock has dropped 23% in one year, under-performing the market.
So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.
See our latest analysis for RLX Technology
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During the unfortunate twelve months during which the RLX Technology share price fell, it actually saw its earnings per share (EPS) improve by 79%. It's quite possible that growth expectations may have been unreasonable in the past.
The divergence between the EPS and the share price is quite notable, during the year. But we might find some different metrics explain the share price movements better.
On the other hand, we're certainly perturbed by the 16% decline in RLX Technology's revenue. Many investors see falling revenue as a likely precursor to lower earnings, so this could well explain the weak share price.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
It is of course excellent to see how RLX Technology has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at RLX Technology's financial health with this free report on its balance sheet.
A Different Perspective
We doubt RLX Technology shareholders are happy with the loss of 23% over twelve months. That falls short of the market, which lost 10%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. Putting aside the last twelve months, it's good to see the share price has rebounded by 170%, in the last ninety days. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. It's always interesting to track share price performance over the longer term. But to understand RLX Technology better, we need to consider many other factors. For instance, we've identified 4 warning signs for RLX Technology (3 are concerning) that you should be aware of.
If you are like me, then you will not want to miss this free list of growing companies that insiders are 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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