It is a pleasure to report that the 36Kr Holdings Inc. (NASDAQ:KRKR) is up 44% in the last quarter. But in truth the last year hasn’t been good for the share price. In fact, the price has declined 36% in a year, falling short of the returns you could get by investing in an index fund.
While the stock has risen 25% in the past week but long term shareholders are still in the red, let’s see what the fundamentals can tell us.
Because 36Kr Holdings made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn’t make profits, we’d generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In just one year 36Kr Holdings saw its revenue fall by 12%. That’s not what investors generally want to see. Shareholders have seen the share price drop 36% 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 company’s revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
36Kr Holdings shareholders are down 36% for the year, even worse than the market loss of 12%. That’s disappointing, but it’s worth keeping in mind that the market-wide selling wouldn’t have helped. Putting aside the last twelve months, it’s good to see the share price has rebounded by 44%, in the last ninety days. Let’s just hope this isn’t the widely-feared ‘dead cat bounce’ (which would indicate further declines to come). 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. For example, we’ve discovered 3 warning signs for 36Kr Holdings (1 is potentially serious!) that you should be aware of before investing here.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
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.
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