Stock Analysis

Fluence's (ASX:FLC) Stock Price Has Reduced 46% In The Past Three Years

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ASX:FLC
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It is a pleasure to report that the Fluence Corporation Limited (ASX:FLC) is up 38% in the last quarter. But that cannot eclipse the less-than-impressive returns over the last three years. After all, the share price is down 46% in the last three years, significantly under-performing the market.

Check out our latest analysis for Fluence

Given that Fluence 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last three years, Fluence saw its revenue grow by 38% per year, compound. That's well above most other pre-profit companies. While its revenue increased, the share price dropped at a rate of 13% per year. That seems like an unlucky result for holders. It's possible that the prior share price assumed unrealistically high future growth. Before considering a purchase, investors should consider how quickly expenses are growing, relative to revenue.

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

earnings-and-revenue-growth
ASX:FLC Earnings and Revenue Growth December 3rd 2020

Take a more thorough look at Fluence's financial health with this free report on its balance sheet.

A Different Perspective

Over the last year, Fluence shareholders took a loss of 36%. In contrast the market gained about 3.4%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Shareholders have lost 13% 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. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 2 warning signs for Fluence that you should be aware of before investing here.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.

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