Strong week for SSH Communications Security Oyj (HEL:SSH1V) shareholders doesn't alleviate pain of one-year loss

It is a pleasure to report that the SSH Communications Security Oyj (HEL:SSH1V) is up 31% in the last quarter. But that doesn't change the reality of under-performance over the last twelve months. In fact, the price has declined 28% in a year, falling short of the returns you could get by investing in an index fund.

The recent uptick of 27% could be a positive sign of things to come, so let's take a look at historical fundamentals.

View our latest analysis for SSH Communications Security Oyj

SSH Communications Security Oyj 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last year SSH Communications Security Oyj saw its revenue grow by 6.5%. That's not a very high growth rate considering it doesn't make profits. Given this lacklustre revenue growth, the share price drop of 28% seems pretty appropriate. It's important not to lose sight of the fact that profitless companies must grow. So remember, if you buy a profitless company then you risk being a profitless investor.

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

This free interactive report on SSH Communications Security Oyj's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

While the broader market lost about 6.4% in the twelve months, SSH Communications Security Oyj shareholders did even worse, losing 28%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. 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 SSH Communications Security Oyj better, we need to consider many other factors. For example, we've discovered 3 warning signs for SSH Communications Security Oyj (1 is concerning!) that you should be aware of before investing here.

We will like SSH Communications Security Oyj better if we see some big insider buys. While we wait, check out this free list of growing companies 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 Finnish exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.