Strong week for Laiqon (ETR:LQAG) shareholders doesn't alleviate pain of three-year loss

Laiqon AG (ETR:LQAG) shareholders should be happy to see the share price up 12% in the last week. But that cannot eclipse the less-than-impressive returns over the last three years. In fact, the share price is down 35% in the last three years, falling well short of the market return.

While the stock has risen 12% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

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Laiqon 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last three years, Laiqon saw its revenue grow by 16% per year, compound. That's a pretty good rate of top-line growth. Shareholders have seen the share price fall at 11% per year, for three years. This implies the market had higher expectations of Laiqon. However, that's in the past now, and it's the future is more important - and the future looks brighter (based on revenue, anyway).

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

Take a more thorough look at Laiqon's financial health with this free report on its balance sheet.

A Different Perspective

While the broader market gained around 15% in the last year, Laiqon shareholders lost 9.2%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 1.6% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Laiqon better, we need to consider many other factors. Take risks, for example - Laiqon has 1 warning sign we think you should be aware of.

We will like Laiqon better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

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