Yahoo Finance Strong week for Kingsoft Cloud Holdings (NASDAQ:KC) shareholders doesn't alleviate pain of one-year loss
It's nice to see the Kingsoft Cloud Holdings Limited (NASDAQ:KC) share price up 17% in a week. But that is meagre solace when you consider how the price has plummeted over the last year. To wit, the stock has dropped 90% over the last year. So it's not that amazing to see a bit of a bounce. The real question is whether the company can turn around its fortunes. We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.
The recent uptick of 17% could be a positive sign of things to come, so let's take a lot at historical fundamentals.
Check out 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last year Kingsoft Cloud Holdings saw its revenue grow by 38%. That's definitely a respectable growth rate. However, it seems like the market wanted more, since the share price is down 90%. One fear might be that the company might be losing too much money and will need to raise more. We'd posit that the future looks challenging, given the disconnect between revenue growth and the share price.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
Kingsoft Cloud Holdings is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So it makes a lot of sense to check out what analysts think Kingsoft Cloud Holdings will earn in the future (free analyst consensus estimates)
A Different Perspective
We doubt Kingsoft Cloud Holdings shareholders are happy with the loss of 90% over twelve months. That falls short of the market, which lost 11%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 48% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. 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. Case in point: We've spotted 3 warning signs for Kingsoft Cloud Holdings 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.
