Investing in stocks inevitably means buying into some companies that perform poorly. But long term Consti Yhtiöt Oyj (HEL:CONSTI) shareholders have had a particularly rough ride in the last three year. Unfortunately, they have held through a 70% decline in the share price in that time. The more recent news is of little comfort, with the share price down 39% in a year.
Consti Yhtiöt Oyj isn't a profitable company, so 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last three years, Consti Yhtiöt Oyj saw its revenue grow by 8.5% per year, compound. That's a pretty good rate of top-line growth. That contrasts with the weak share price, which has fallen 33% compounded, over three years. To be frank we're surprised to see revenue growth and share price growth diverge so strongly. So this is one stock that might be worth investigating further, or even adding to your watchlist.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
Take a more thorough look at Consti Yhtiöt Oyj's financial health with this free report on its balance sheet.
A Different Perspective
Over the last year, Consti Yhtiöt Oyj shareholders took a loss of 39%. In contrast the market gained about 2.7%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Shareholders have lost 32% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. You could get a better understanding of Consti Yhtiöt Oyj's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
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.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on FI exchanges.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.