Some Imperium Technology Group Limited (HKG:776) shareholders are probably rather concerned to see the share price fall 64% over the last three months. But that doesn’t change the fact that the returns over the last three years have been very strong. In fact, the share price is up a full 260% compared to three years ago. So the recent fall in the share price should be viewed in that context. The fundamental business performance will ultimately dictate whether the top is in, or if this is a stellar buying opportunity.
Since the long term performance has been good but there’s been a recent pullback of 16%, let’s check if the fundamentals match the share price.
Check out the opportunities and risks within the HK Consumer Durables industry.
Imperium Technology Group 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Imperium Technology Group actually saw its revenue drop by 16% per year over three years. So we wouldn’t have expected the share price to gain 53% per year, but it has. It’s fair to say shareholders are definitely counting on a bright future.
The company’s revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Take a more thorough look at Imperium Technology Group’s financial health with this free report on its balance sheet.
A Different Perspective
While the broader market lost about 34% in the twelve months, Imperium Technology Group shareholders did even worse, losing 62%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there’s a good opportunity. Longer term investors wouldn’t be so upset, since they would have made 1.3%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Imperium Technology Group is showing 3 warning signs in our investment analysis , you should know about…
But note: Imperium Technology Group 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 HK 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.