If you love investing in stocks you’re bound to buy some losers. But the long term shareholders of UpSnap, Inc. (CNSX:UP) have had an unfortunate run in the last three years. Sadly for them, the share price is down 60% in that time. And the ride hasn’t got any smoother in recent times over the last year, with the price 50% lower in that time.
Because UpSnap is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. 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 the last three years, UpSnap’s revenue dropped 13% per year. That’s not what investors generally want to see. With revenue in decline, and profit but a dream, we can understand why the share price has been declining at 26% per year. Having said that, if growth is coming in the future now may be the low ebb for the company. We’d be pretty wary of this one until it makes a profit, because we don’t specialize in finding turnaround situations.
Depicted in the graphic below, you’ll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
It’s probably worth noting that the CEO is paid less than the median at similar sized companies. It’s always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free interactive report on UpSnap’s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
The last twelve months weren’t great for UpSnap shares, which cost holders 50%, while the market was up about 4.3%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Shareholders have lost 26% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. 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. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
But note: UpSnap may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.