Evotec (ETR:EVT investor three-year losses grow to 60% as the stock sheds €213m this past week

Investing in stocks inevitably means buying into some companies that perform poorly. Long term Evotec SE (ETR:EVT) shareholders know that all too well, since the share price is down considerably over three years. Sadly for them, the share price is down 60% in that time. And more recent buyers are having a tough time too, with a drop of 30% in the last year. More recently, the share price has dropped a further 26% in a month.

With the stock having lost 8.3% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Check out our latest analysis for Evotec

Given that Evotec 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. When a company doesn't make profits, we'd generally expect to see good 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, Evotec grew revenue at 19% per year. That's a fairly respectable growth rate. So some shareholders would be frustrated with the compound loss of 17% per year. The market must have had really high expectations to be disappointed with this progress. So this is one stock that might be worth investigating further, or even adding to your watchlist.

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

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. If you are thinking of buying or selling Evotec stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

While the broader market gained around 1.1% in the last year, Evotec shareholders lost 30%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 6% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 1 warning sign for Evotec that you should be aware of before investing here.

But note: Evotec 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 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.