A good week for shareholders of JD Health International (HKG: 6618) does not ease the pain of the loss of a year

This week we saw the JD Health International Inc. (CHF:6618) the stock price climbs 28%. It’s not great that the stock is down from last year. But at least it made up for the 28% loss in its market.

Although last week was more reassuring for shareholders, they are still in the red over the past year, so let’s see if the underlying activity was responsible for the decline.

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Given that JD Health International has posted a loss over the past twelve months, we think the market is likely more focused on revenue and revenue growth, at least for now. Generally speaking, companies without profits should increase their revenue every year, and at a good pace. Indeed, rapid revenue growth can be easily extrapolated to predict profits, often of considerable size.

JD Health International increased its revenue by 54% over the past year. This is a solid result that is better than most other loss-making companies. Given that the whole market is down, the 23% drop last year isn’t too bad. Given the strong revenue growth, the stock may simply be suffering from market conditions. Given the strong revenue growth, this could be an opportunity for investors focused on long-term growth, assuming the stock has the resources to achieve profitability. Either way, we’d say the lag between revenue growth and stock price warrants closer examination.

The company’s revenues and profits (over time) are shown in the image below (click to see exact figures).

SEHK: 6618 Earnings and Revenue Growth Nov 7, 2022

JD Health International is well known to investors and many smart analysts have tried to predict future profit levels. You can see what analysts are predicting for JD Health International in this interactive graph of future earnings estimates.

A different perspective

While they would no doubt have preferred to make a profit, at least JD Health International shareholders didn’t do too badly last year. Their 23% loss actually beat the broader market, which lost about 28%. Unfortunately for shareholders, the stock price momentum hasn’t improved much with a 12% drop in about 90 days. That doesn’t sound great to us, but it’s possible the market could overreact to earlier disappointment. If you want to do more detailed research on JD Health International, you may want to check whether insiders have bought or sold shares of the company.

If you’re like me, then you not want to miss this free list of growing companies insiders are buying.

Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on HK exchanges.

Valuation is complex, but we help make it simple.

Find out if JD Health International is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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