Those Who Purchased Emerald Holding (NYSE:EEX) Shares Three Years Ago Have A 91% Loss To Show For It

Every investor on earth makes bad calls sometimes. But you want to avoid the really big losses like the plague. So spare a thought for the long term shareholders of Emerald Holding, Inc. (NYSE:EEX); the share price is down a whopping 91% in the last three years. That might cause some serious doubts about the merits of the initial decision to buy the stock, to put it mildly. And over the last year the share price fell 87%, so we doubt many shareholders are delighted. The falls have accelerated recently, with the share price down 83% in the last three months.

While a drop like that is definitely a body blow, money isn't as important as health and happiness.

Check out our latest analysis for Emerald Holding

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Emerald Holding has made a profit in the past. On the other hand, it reported a trailing twelve months loss, suggesting it isn't reliably profitable. Other metrics may better explain the share price move.

We note that the dividend seems healthy enough, so that probably doesn't explain the share price drop. It's good to see that Emerald Holding has increased its revenue over the last three years. If the company can keep growing revenue, there may be an opportunity for investors. You might have to dig deeper to understand the recent share price weakness.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

The last twelve months weren't great for Emerald Holding shares, which performed worse than the market, costing holders 87% , including dividends . Meanwhile, the broader market slid about 2.1%, likely weighing on the stock. Shareholders have lost 54% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. It's always interesting to track share price performance over the longer term. But to understand Emerald Holding better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Emerald Holding you should be aware of, and 1 of them is significant.

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 US 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.

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