Yahoo Finance Shareholders in PROS Holdings (NYSE:PRO) have lost 36%, as stock drops 5.0% this past week
In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. But even the best stock picker will only win with some selections. So we wouldn't blame long term PROS Holdings, Inc. (NYSE:PRO) shareholders for doubting their decision to hold, with the stock down 36% over a half decade. More recently, the share price has dropped a further 9.7% in a month. However, we note the price may have been impacted by the broader market, which is down 4.1% in the same time period.
If the past week is anything to go by, investor sentiment for PROS Holdings isn't positive, so let's see if there's a mismatch between fundamentals and the share price.
See our latest analysis for PROS Holdings
Because PROS Holdings 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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 five years, PROS Holdings grew its revenue at 6.0% per year. That's a pretty good rate for a long time period. We doubt many shareholders are ok with the fact the share price has fallen 6% each year for half a decade. Those who bought back then clearly believed in stronger growth - and maybe even profits. The lesson is that if you buy shares in a money losing company you could end up losing money.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
This free interactive report on PROS Holdings' balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
PROS Holdings shareholders are up 18% for the year. But that was short of the market average. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 6% endured over half a decade. It could well be that the business is stabilizing. It's always interesting to track share price performance over the longer term. But to understand PROS Holdings better, we need to consider many other factors. For example, we've discovered 3 warning signs for PROS Holdings (1 shouldn't be ignored!) 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 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.
