Did You Manage To Avoid Patspin India’s (NSE:PATSPINLTD) 44% Share Price Drop?

Patspin India Limited (NSE:PATSPINLTD) shareholders are doubtless heartened to see the share price bounce 33% in just one week. But that doesn’t change the reality of under-performance over the last twelve months. The cold reality is that the stock has dropped 44% in one year, under-performing the market.

Check out our latest analysis for Patspin India

Given that Patspin India didn’t make a profit in the last twelve months, we’ll focus on revenue growth to form a quick view of its business development. When a company doesn’t make profits, we’d generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Patspin India’s revenue didn’t grow at all in the last year. In fact, it fell 4.7%. That’s not what investors generally want to see. The stock price has languished lately, falling 44% in a year. That seems pretty reasonable given the lack of both profits and revenue growth. We think most holders must believe revenue growth will improve, or else costs will decline.

The company’s revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

NSEI:PATSPINLTD Income Statement, December 25th 2019
NSEI:PATSPINLTD Income Statement, December 25th 2019

While the share price may move with revenue, other factors can also play a role. For example, we’ve discovered 5 warning signs for Patspin India (of which 2 are major) which any shareholder or potential investor should be aware of.

A Different Perspective

Investors in Patspin India had a tough year, with a total loss of 44%, against a market gain of about 7.3%. 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 3.2% per year over five years. We realise that Buffett has said investors should ‘buy when there is blood on the streets’, but we caution that investors should first be sure they are buying a high quality businesses. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

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 IN 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.