Investing in stocks inevitably means buying into some companies that perform poorly. But the last three years have been particularly tough on longer term Jaywing plc (LON:JWNG) shareholders. Regrettably, they have had to cope with a 58% drop in the share price over that period. And more recent buyers are having a tough time too, with a drop of 38% in the last year. The falls have accelerated recently, with the share price down 30% in the last three months.
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Jaywing isn’t a profitable company, so it is unlikely we’ll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last three years, Jaywing saw its revenue grow by 12% per year, compound. That’s a fairly respectable growth rate. That contrasts with the weak share price, which has fallen 25% compounded, over three years. The market must have had really high expectations to be disappointed with this progress. So this is one stock that might be worth investigating further, or even adding to your watchlist.
The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.
This free interactive report on Jaywing’s balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
We regret to report that Jaywing shareholders are down 38% for the year. Unfortunately, that’s worse than the broader market decline of 1.1%. Having said that, it’s inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year’s performance caps off a bad run, with the shareholders facing a total loss of 15% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. You could get a better understanding of Jaywing’s growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Of course Jaywing 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 GB 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 firstname.lastname@example.org. 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.