Investors in GreenFirst Forest Products (TSE:GFP) from three years ago are still down 76%, even after 14% gain this past week

It's nice to see the GreenFirst Forest Products Inc. (TSE:GFP) share price up 14% in a week. But only the myopic could ignore the astounding decline over three years. Indeed, the share price is down a whopping 76% in the last three years. So it's about time shareholders saw some gains. Only time will tell if the company can sustain the turnaround.

While the last three years has been tough for GreenFirst Forest Products 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.

See our latest analysis for GreenFirst Forest Products

Given that GreenFirst Forest Products 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 desire 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.

Over three years, GreenFirst Forest Products grew revenue at 23% per year. That's well above most other pre-profit companies. So on the face of it we're really surprised to see the share price down 21% a year in the same time period. The share price makes us wonder if there is an issue with profitability. Sometimes fast revenue growth doesn't lead to profits. If the company is low on cash, it may have to raise capital soon.

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

Take a more thorough look at GreenFirst Forest Products' financial health with this free report on its balance sheet.

A Different Perspective

While the broader market gained around 21% in the last year, GreenFirst Forest Products shareholders lost 37%. 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. Longer term investors wouldn't be so upset, since they would have made 20%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand GreenFirst Forest Products better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for GreenFirst Forest Products you should be aware of, and 1 of them is potentially serious.

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 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.