Strong week for Sensorion (EPA:ALSEN) shareholders doesn't alleviate pain of three-year loss

If you love investing in stocks you're bound to buy some losers. But long term Sensorion SA (EPA:ALSEN) shareholders have had a particularly rough ride in the last three year. Sadly for them, the share price is down 62% in that time.

On a more encouraging note the company has added €27m to its market cap in just the last 7 days, so let's see if we can determine what's driven the three-year loss for shareholders.

View our latest analysis for Sensorion

Given that Sensorion 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over three years, Sensorion grew revenue at 25% per year. That is faster than most pre-profit companies. In contrast, the share price is down 17% compound, over three years - disappointing by most standards. This could mean hype has come out of the stock because the losses are concerning investors. But a share price drop of that magnitude could well signal that the market is overly negative on the stock.

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

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

A Different Perspective

It's nice to see that Sensorion shareholders have received a total shareholder return of 6.9% over the last year. That certainly beats the loss of about 5% 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. Even so, be aware that Sensorion is showing 3 warning signs in our investment analysis , and 2 of those are a bit unpleasant...

Of course Sensorion may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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