It is a pleasure to report that the Music Broadcast Limited (NSE:RADIOCITY) is up 62% in the last quarter. But over the last three years we’ve seen a quite serious decline. Indeed, the share price is down a tragic 65% in the last three years. So it is really good to see an improvement. The rise has some hopeful, but turnarounds are often precarious.
We don’t think that Music Broadcast’s modest trailing twelve month profit has the market’s full attention at the moment. We think revenue is probably a better guide. Generally speaking, we’d consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.
In the last three years Music Broadcast saw its revenue shrink by 4.9% per year. That is not a good result. With revenue in decline, and profit but a dream, we can understand why the share price has been declining at 18% per year. Having said that, if growth is coming in the future, now may be the low ebb for the company. We don’t generally like to own companies that lose money and can’t grow revenues. But any company is worth looking at when it makes a maiden profit.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Take a more thorough look at Music Broadcast’s financial health with this free report on its balance sheet.
A Different Perspective
The last twelve months weren’t great for Music Broadcast shares, which cost holders 28%, while the market was up about 9.8%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Unfortunately, the longer term story isn’t pretty, with investment losses running at 18% per year over three years. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. It’s always interesting to track share price performance over the longer term. But to understand Music Broadcast better, we need to consider many other factors. For instance, we’ve identified 5 warning signs for Music Broadcast that you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IN exchanges.
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