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It’s nice to see the LightPath Technologies, Inc. (NASDAQ:LPTH) share price up 13% in a week. But that’s not enough to compensate for the decline over the last twelve months. Specifically, the stock price slipped by 57% in that time. It’s not that amazing to see a bounce after a drop like that. You could argue that the sell-off was too severe.
Given that LightPath Technologies 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
LightPath Technologies’s revenue didn’t grow at all in the last year. In fact, it fell 1.1%. That looks pretty grim, at a glance. In the absence of profits, it’s not unreasonable that the share price fell 57%. Fingers crossed this is the low ebb for the stock. We don’t generally like to own companies with falling revenues and no profits, so we’re pretty cautious of this one, at the moment.
Take a more thorough look at LightPath Technologies’s financial health with this free report on its balance sheet.
A Different Perspective
While the broader market gained around 8.5% in the last year, LightPath Technologies shareholders lost 57%. 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 4.9% 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. If you would like to research LightPath Technologies in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.