This week we saw the RISE Education Cayman Ltd (NASDAQ:REDU) share price climb by 12%. But only the myopic could ignore the astounding decline over three years. Indeed, the share price is down a whopping 77% in the last three years. So it's about time shareholders saw some gains. Only time will tell if the company can sustain the turnaround.

View our latest analysis for RISE Education Cayman

RISE Education Cayman wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. 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.

Over three years, RISE Education Cayman grew revenue at 1.5% per year. Given it's losing money in pursuit of growth, we are not really impressed with that. Nonetheless, it's fair to say the rapidly declining share price (down 21%, compound, over three years) suggests the market is very disappointed with this level of growth. We generally don't try to 'catch the falling knife'. Of course, revenue growth is nice but generally speaking the lower the profits, the riskier the business - and this business isn't making steady profits.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

If you are thinking of buying or selling RISE Education Cayman stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Over the last year RISE Education Cayman shareholders have received a TSR of 4.0%. Unfortunately this falls short of the market return of around 48%. On the bright side, that's certainly better than the yearly loss of about 21% endured over the last three years, implying that the company is doing better recently. It could well be that the business is stabilizing. It's always interesting to track share price performance over the longer term. But to understand RISE Education Cayman better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with RISE Education Cayman (at least 2 which make us uncomfortable) , and understanding them should be part of your investment process.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.