Shareholders in Bragg Gaming Group (TSE:BRAG) have lost 61%, as stock drops 14% this past week

Generally speaking long term investing is the way to go. But no-one is immune from buying too high. To wit, the Bragg Gaming Group Inc. (TSE:BRAG) share price managed to fall 61% over five long years. That's an unpleasant experience for long term holders. And it's not just long term holders hurting, because the stock is down 50% in the last year. Furthermore, it's down 45% in about a quarter. That's not much fun for holders.

With the stock having lost 14% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

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Bragg Gaming Group wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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.

Over five years, Bragg Gaming Group grew its revenue at 19% per year. That's well above most other pre-profit companies. In contrast, the share price is has averaged a loss of 10% per year - that's quite disappointing. This could mean high expectations have been tempered, potentially because investors are looking to the bottom line. Given the revenue growth we'd consider the stock to be quite an interesting prospect if the company has a clear path to profitability.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So it makes a lot of sense to check out what analysts think Bragg Gaming Group will earn in the future (free profit forecasts).

A Different Perspective

While the broader market gained around 23% in the last year, Bragg Gaming Group shareholders lost 50%. 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 10% per year over five years. We realise that Baron Rothschild 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 business. It's always interesting to track share price performance over the longer term. But to understand Bragg Gaming Group better, we need to consider many other factors. Even so, be aware that Bragg Gaming Group is showing 3 warning signs in our investment analysis , you should know about...

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.