Yahoo Finance Imagine Owning Windar Photonics (LON:WPHO) While The Price Tanked 68%
If you love investing in stocks you're bound to buy some losers. But the long term shareholders of Windar Photonics PLC (LON:WPHO) have had an unfortunate run in the last three years. So they might be feeling emotional about the 68% share price collapse, in that time. And more recent buyers are having a tough time too, with a drop of 63% in the last year. Furthermore, it's down 29% in about a quarter. That's not much fun for holders.
Check out our latest analysis for Windar Photonics
Because Windar Photonics 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. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Over three years, Windar Photonics grew revenue at 31% per year. That's well above most other pre-profit companies. In contrast, the share price is down 31% compound, over three years - disappointing by most standards. It seems likely that the market is worried about the continual losses. But a share price drop of that magnitude could well signal that the market is overly negative on the stock.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
Take a more thorough look at Windar Photonics's financial health with this free report on its balance sheet.
A Different Perspective
Over the last year, Windar Photonics shareholders took a loss of 63%. In contrast the market gained about 17%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The three-year loss of 31% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. Although Warren Buffett famously said he likes to 'buy when there is blood on the streets', he also focusses on high quality stocks with solid prospects. It's always interesting to track share price performance over the longer term. But to understand Windar Photonics better, we need to consider many other factors. For example, we've discovered 5 warning signs for Windar Photonics that you should be aware of before investing here.
But note: Windar Photonics 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 GB exchanges.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
