It is a pleasure to report that the Eden Research plc (LON:EDEN) is up 37% in the last quarter. But that doesn't change the fact that the returns over the last five years have been less than pleasing. After all, the share price is down 40% in that time, significantly under-performing the market.
Given that Eden Research 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. Shareholders of unprofitable companies usually expect strong revenue growth. 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 half decade, Eden Research saw its revenue increase by 30% per year. That's well above most other pre-profit companies. The share price drop of 7% per year over five years would be considered let down. So you might argue the Eden Research should get more credit for its rather impressive revenue growth over the period. If that's the case, now might be the smart time to take a close look at it.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
If you are thinking of buying or selling Eden Research stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
It's nice to see that Eden Research shareholders have received a total shareholder return of 5.4% over the last year. That certainly beats the loss of about 7% 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. It's always interesting to track share price performance over the longer term. But to understand Eden Research better, we need to consider many other factors. Take risks, for example - Eden Research has 4 warning signs (and 1 which is significant) we think you should know about.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB 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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