The past three years for Mesa Laboratories (NASDAQ:MLAB) investors has not been profitable

Mesa Laboratories, Inc. (NASDAQ:MLAB) shareholders should be happy to see the share price up 12% in the last quarter. But over the last three years we've seen a quite serious decline. In that time, the share price dropped 61%. So the improvement may be a real relief to some. After all, could be that the fall was overdone.

Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.

Check out our latest analysis for Mesa Laboratories

While Mesa Laboratories made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

In the last three years, Mesa Laboratories saw its revenue grow by 19% per year, compound. That's a pretty good rate of top-line growth. So some shareholders would be frustrated with the compound loss of 17% per year. To be frank we're surprised to see revenue growth and share price growth diverge so strongly. It would be well worth taking a closer look at the company, to determine growth trends (and balance sheet strength).

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

earnings-and-revenue-growth

We know that Mesa Laboratories has improved its bottom line lately, but what does the future have in store? You can see what analysts are predicting for Mesa Laboratories in this interactive graph of future profit estimates.

A Different Perspective

Investors in Mesa Laboratories had a tough year, with a total loss of 39% (including dividends), against a market gain of about 23%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 9% 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. It's always interesting to track share price performance over the longer term. But to understand Mesa Laboratories better, we need to consider many other factors. For example, we've discovered 2 warning signs for Mesa Laboratories (1 doesn't sit too well with us!) that you should be aware of before investing here.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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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.