Paragon ID's (EPA:PID) Stock Price Has Reduced 41% In The Past Three Years

For many investors, the main point of stock picking is to generate higher returns than the overall market. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. We regret to report that long term Paragon ID SA (EPA:PID) shareholders have had that experience, with the share price dropping 41% in three years, versus a market return of about 22%. And over the last year the share price fell 27%, so we doubt many shareholders are delighted.

See our latest analysis for Paragon ID

Because Paragon ID 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. 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, Paragon ID grew revenue at 15% per year. That's a fairly respectable growth rate. Shareholders have endured a share price decline of 12% per year. This implies the market had higher expectations of Paragon ID. However, that's in the past now, and it's the future is more important - and the future looks brighter (based on revenue, anyway).

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

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

A Different Perspective

Over the last year, Paragon ID shareholders took a loss of 27%. In contrast the market gained about 5.0%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Shareholders have lost 12% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Paragon ID (of which 1 shouldn't be ignored!) you should know about.

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.

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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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