Yahoo Finance Did Changing Sentiment Drive Net Insight's (STO:NETI B) Share Price Down A Worrying 62%?
Net Insight AB (publ) (STO:NETI B) shareholders will doubtless be very grateful to see the share price up 110% in the last month. Meanwhile over the last three years the stock has dropped hard. Indeed, the share price is down a tragic 62% in the last three years. So it is really good to see an improvement. The rise has some hopeful, but turnarounds are often precarious.
Check out our latest analysis for Net Insight
Net Insight 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over the last three years, Net Insight's revenue dropped 2.6% per year. That's not what investors generally want to see. The share price decline of 28% compound, over three years, is understandable given the company doesn't have profits to boast of, and revenue is moving in the wrong direction. Of course, it's the future that will determine whether today's price is a good one. We'd be pretty wary of this one until it makes a profit, because we don't specialize in finding turnaround situations.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. So it makes a lot of sense to check out what analysts think Net Insight will earn in the future (free profit forecasts).
A Different Perspective
Net Insight shareholders gained a total return of 2.8% during the year. But that return falls short of the market. But at least that's still a gain! Over five years the TSR has been a reduction of 1.1% per year, over five years. So this might be a sign the business has turned its fortunes around. You could get a better understanding of Net Insight's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
But note: Net Insight may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on SE exchanges.
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