Advertisement
UK markets close in 6 hours 32 minutes
  • FTSE 100

    7,971.03
    +39.05 (+0.49%)
     
  • FTSE 250

    19,825.48
    +14.82 (+0.07%)
     
  • AIM

    741.79
    -0.32 (-0.04%)
     
  • GBP/EUR

    1.1686
    +0.0017 (+0.14%)
     
  • GBP/USD

    1.2594
    -0.0044 (-0.35%)
     
  • Bitcoin GBP

    56,040.79
    +408.83 (+0.73%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • S&P 500

    5,248.49
    +44.91 (+0.86%)
     
  • DOW

    39,760.08
    +477.75 (+1.22%)
     
  • CRUDE OIL

    81.87
    +0.52 (+0.64%)
     
  • GOLD FUTURES

    2,218.10
    +5.40 (+0.24%)
     
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     
  • HANG SENG

    16,541.42
    +148.58 (+0.91%)
     
  • DAX

    18,505.67
    +28.58 (+0.15%)
     
  • CAC 40

    8,249.28
    +44.47 (+0.54%)
     

Bausch Health Companies (NYSE:BHC) shareholders are up 19% this past week, but still in the red over the last three years

It's nice to see the Bausch Health Companies Inc. (NYSE:BHC) share price up 19% in a week. But the last three years have seen a terrible decline. In that time the share price has melted like a snowball in the desert, down 73%. So it's about time shareholders saw some gains. The thing to think about is whether the business has really turned around.

While the last three years has been tough for Bausch Health Companies shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

View our latest analysis for Bausch Health Companies

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

ADVERTISEMENT

During five years of share price growth, Bausch Health Companies moved from a loss to profitability. We would usually expect to see the share price rise as a result. So given the share price is down it's worth checking some other metrics too.

The company has kept revenue pretty healthy over the last three years, so we doubt that explains the falling share price. We're not entirely sure why the share price is dropped, but it does seem likely investors have become less optimistic about the business.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

earnings-and-revenue-growth
earnings-and-revenue-growth

We know that Bausch Health Companies has improved its bottom line over the last three years, but what does the future have in store? You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

We regret to report that Bausch Health Companies shareholders are down 72% for the year. Unfortunately, that's worse than the broader market decline of 18%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 11% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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 2 warning signs for Bausch Health Companies (1 is significant!) 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.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here