Reflecting on X-FAB Silicon Foundries' (EPA:XFAB) Share Price Returns Over The Last Three Years

It is doubtless a positive to see that the X-FAB Silicon Foundries SE (EPA:XFAB) share price has gained some 49% in the last three months. But over the last three years we've seen a quite serious decline. In that time, the share price dropped 54%. So the improvement may be a real relief to some. While many would remain nervous, there could be further gains if the business can put its best foot forward.

View our latest analysis for X-FAB Silicon Foundries

X-FAB Silicon Foundries isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last three years, X-FAB Silicon Foundries' revenue dropped 8.0% per year. That's not what investors generally want to see. The share price decline of 15% compound, over three years, is understandable given the company doesn't have profits to boast of, and revenue is moving in the wrong direction. Of course, it's the future that will determine whether today's price is a good one. We'd be pretty wary of this one until it makes a profit, because we don't specialize in finding turnaround situations.

The graphic below depicts how earnings and revenue have changed over time (unveil 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. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. So it makes a lot of sense to check out what analysts think X-FAB Silicon Foundries will earn in the future (free profit forecasts).

A Different Perspective

We're pleased to report that X-FAB Silicon Foundries rewarded shareholders with a total shareholder return of 5.9% over the last year. That certainly beats the loss of about 15% per year over three years. The optimist would say this is evidence that the stock has bottomed, and better days lie ahead. It's always interesting to track share price performance over the longer term. But to understand X-FAB Silicon Foundries better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with X-FAB Silicon Foundries .

Of course X-FAB Silicon Foundries 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 FR exchanges.

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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. 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.
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