Strong week for GURU Organic Energy (TSE:GURU) shareholders doesn't alleviate pain of one-year loss

It's nice to see the GURU Organic Energy Corp. (TSE:GURU) share price up 15% in a week. But that hardly compensates for the shocking decline over the last twelve months. To wit, the stock has dropped 77% over the last year. So the rise may not be much consolation. The important thing is whether the company can turn it around, longer term.

While the last year has been tough for GURU Organic Energy shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

View our latest analysis for GURU Organic Energy

Because GURU Organic Energy made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

GURU Organic Energy's revenue didn't grow at all in the last year. In fact, it fell 11%. That's not what investors generally want to see. The market obviously agrees, since the share price tanked 77%. That's a stern reminder that profitless companies need to grow the top line, at the very least. Of course, extreme share price falls can be an opportunity for those who are willing to really dig deeper to understand a high risk company like this.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. If you are thinking of buying or selling GURU Organic Energy stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

We doubt GURU Organic Energy shareholders are happy with the loss of 77% over twelve months. That falls short of the market, which lost 1.0%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 5.8% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. 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. Take risks, for example - GURU Organic Energy has 2 warning signs we think you should be aware of.

There are plenty of other companies that have insiders buying up shares. You probably do 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 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.