Shareholders in Hanesbrands (NYSE:HBI) have lost 76%, as stock drops 4.1% this past week

While not a mind-blowing move, it is good to see that the Hanesbrands Inc. (NYSE:HBI) share price has gained 15% in the last three months. But the last three years have seen a terrible decline. The share price has sunk like a leaky ship, down 78% in that time. So we're relieved for long term holders to see a bit of uplift. The thing to think about is whether the business has really turned around.

With the stock having lost 4.1% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Check out our latest analysis for Hanesbrands

Hanesbrands wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last three years, Hanesbrands' revenue dropped 4.3% per year. That's not what investors generally want to see. Having said that the 21% annualized share price decline highlights the risk of investing in unprofitable companies. This business clearly needs to grow revenues if it is to perform as investors hope. Don't let a share price decline ruin your calm. You make better decisions when you're calm.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

This free interactive report on Hanesbrands' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Hanesbrands shareholders are down 6.3% for the year, but the market itself is up 22%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, longer term shareholders are suffering worse, given the loss of 11% doled out over the last five 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 Hanesbrands better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Hanesbrands .

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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.