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Taking the occasional loss comes part and parcel with investing on the stock market. Unfortunately, shareholders of ReTo Eco-Solutions, Inc. (NASDAQ:RETO) have suffered share price declines over the last year. The share price is down a hefty 62% in that time. ReTo Eco-Solutions hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. The falls have accelerated recently, with the share price down 31% in the last three months.
Given that ReTo Eco-Solutions 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. 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.
ReTo Eco-Solutions's revenue didn't grow at all in the last year. In fact, it fell 7.0%. That looks pretty grim, at a glance. The share price drop of 62% is understandable given the company doesn't have profits to boast of. 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 how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
If you are thinking of buying or selling ReTo Eco-Solutions stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Given that the market gained 2.3% in the last year, ReTo Eco-Solutions shareholders might be miffed that they lost 62%. 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 31% 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. Take risks, for example - ReTo Eco-Solutions has 2 warning signs we think you should be aware of.
But note: ReTo Eco-Solutions 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
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