Titomic's(ASX:TTT) Share Price Is Down 54% Over The Past Three Years.

The truth is that if you invest for long enough, you're going to end up with some losing stocks. But long term Titomic Limited (ASX:TTT) shareholders have had a particularly rough ride in the last three year. Sadly for them, the share price is down 54% in that time. And more recent buyers are having a tough time too, with a drop of 45% in the last year. It's up 1.8% in the last seven days.

See our latest analysis for Titomic

Titomic isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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.

Over three years, Titomic grew revenue at 102% per year. That is faster than most pre-profit companies. In contrast, the share price is down 15% compound, over three years - disappointing by most standards. This could mean hype has come out of the stock because the losses are concerning investors. But a share price drop of that magnitude could well signal that the market is overly negative on the stock.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. If you are thinking of buying or selling Titomic stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

The last twelve months weren't great for Titomic shares, which cost holders 45%, while the market was up about 13%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The three-year loss of 15% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should be aware of the 3 warning signs we've spotted with Titomic .

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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