Strong week for Klingelnberg (VTX:KLIN) shareholders doesn't alleviate pain of three-year loss

By
Simply Wall St
Published
November 25, 2021
SWX:KLIN
Source: Shutterstock

Klingelnberg AG (VTX:KLIN) shareholders should be happy to see the share price up 19% in the last month. But that cannot eclipse the less-than-impressive returns over the last three years. Truth be told the share price declined 47% in three years and that return, Dear Reader, falls short of what you could have got from passive investing with an index fund.

While the stock has risen 18% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

Check out our latest analysis for Klingelnberg

Because Klingelnberg 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last three years Klingelnberg saw its revenue shrink by 17% per year. That's definitely a weaker result than most pre-profit companies report. On the face of it we'd posit the share price fall of 14% compound, over three years is well justified by the fundamental deterioration. It would probably be worth asking whether the company can fund itself to profitability. The company will need to return to revenue growth as quickly as possible, if it wants to see some enthusiasm from investors.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
SWX:KLIN Earnings and Revenue Growth November 26th 2021

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

Over the last year Klingelnberg shareholders have received a TSR of 1.9%. Unfortunately this falls short of the market return of around 22%. The silver lining is that the recent rise is far preferable to the annual loss of 13% that shareholders have suffered over the last three years. It could well be that the business is stabilizing. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

If you are like me, then you will 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 CH exchanges.

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