Imagine Owning GECI International (EPA:GECP) And Wondering If The 26% Share Price Slide Is Justified

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GECI International S.A. (EPA:GECP) shareholders should be happy to see the share price up 16% in the last month. But that is minimal compensation for the share price under-performance over the last year. In fact the stock is down 26% in the last year, well below the market return.

Check out our latest analysis for GECI International

GECI International isn’t currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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.

In the last twelve months, GECI International increased its revenue by 23%. We think that is pretty nice growth. Unfortunately that wasn’t good enough to stop the share price dropping 26%. This implies the market was expecting better growth. But if revenue keeps growing, then at a certain point the share price would likely follow.

The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).

ENXTPA:GECP Income Statement, May 3rd 2019
ENXTPA:GECP Income Statement, May 3rd 2019

If you are thinking of buying or selling GECI International stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

The last twelve months weren’t great for GECI International shares, which cost holders 26%, while the market was up about 4.7%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The three-year loss of 9.1% per year isn’t as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. You could get a better understanding of GECI International’s growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.