Yahoo Finance Shareholders in KE Holdings (NYSE:BEKE) have lost 43%, as stock drops 12% this past week
Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. But if you buy individual stocks, you can do both better or worse than that. For example, the KE Holdings Inc. (NYSE:BEKE) share price is down 43% in the last year. That falls noticeably short of the market decline of around 21%. KE Holdings may have better days ahead, of course; we've only looked at a one year period. More recently, the share price has dropped a further 41% in a month.
With the stock having lost 12% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.
View our latest analysis for KE Holdings
Given that KE Holdings 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 fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
KE Holdings' revenue didn't grow at all in the last year. In fact, it fell 29%. That looks pretty grim, at a glance. Shareholders have seen the share price drop 43% in that time. What would you expect when revenue is falling, and it doesn't make a profit? We think most holders must believe revenue growth will improve, or else costs will decline.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
KE 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 KE Holdings will earn in the future (free analyst consensus estimates)
A Different Perspective
We doubt KE Holdings shareholders are happy with the loss of 43% over twelve months. That falls short of the market, which lost 21%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 25% 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. It's always interesting to track share price performance over the longer term. But to understand KE Holdings better, we need to consider many other factors. For instance, we've identified 2 warning signs for KE Holdings that you should be aware of.
Of course KE Holdings may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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