Byron Energy's (ASX:BYE) Stock Price Has Reduced 45% In The Past Year

It's easy to match the overall market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. Unfortunately the Byron Energy Limited (ASX:BYE) share price slid 45% over twelve months. That's disappointing when you consider the market returned 4.2%. At least the damage isn't so bad if you look at the last three years, since the stock is down 18% in that time. Unhappily, the share price slid 2.9% in the last week.

View our latest analysis for Byron Energy

We don't think that Byron Energy's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

Byron Energy's revenue didn't grow at all in the last year. In fact, it fell 32%. That's not what investors generally want to see. Shareholders have seen the share price drop 45% in that time. That seems pretty reasonable given the lack of both profits and revenue growth. It's hard to escape the conclusion that buyers must envision either growth down the track, cost cutting, or both.

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

We know that Byron Energy has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at Byron Energy's financial health with this free report on its balance sheet.

A Different Perspective

Investors in Byron Energy had a tough year, with a total loss of 45%, against a market gain of about 4.2%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 2% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Byron Energy better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Byron Energy you should be aware of, and 1 of them is concerning.

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 AU exchanges.

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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. 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.
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