Shareholders in Serviceware (ETR:SJJ) have lost 57%, as stock drops 12% this past week

We think intelligent long term investing is the way to go. But that doesn't mean long term investors can avoid big losses. For example the Serviceware SE (ETR:SJJ) share price dropped 57% over five years. That's not a lot of fun for true believers. Furthermore, it's down 12% in about a quarter. That's not much fun for holders. Of course, this share price action may well have been influenced by the 9.1% decline in the broader market, throughout the period.

After losing 12% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

View our latest analysis for Serviceware

Because Serviceware 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. Shareholders of unprofitable companies usually expect 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 five years, Serviceware grew its revenue at 9.5% per year. That's a fairly respectable growth rate. The share price return isn't so respectable with an annual loss of 9% over the period. It seems probably that the business has failed to live up to initial expectations. A pessimistic market can create opportunities.

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 Serviceware's financial health with this free report on its balance sheet.

A Different Perspective

We're pleased to report that Serviceware shareholders have received a total shareholder return of 11% over one year. That certainly beats the loss of about 9% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Serviceware you should know about.

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 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.