The one-year earnings decline has likely contributed toSRT Marine Systems' (LON:SRT) shareholders losses of 44% over that period

Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. But if you buy individual stocks, you can do both better or worse than that. Investors in SRT Marine Systems plc (LON:SRT) have tasted that bitter downside in the last year, as the share price dropped 44%. That's well below the market return of 4.6%. Notably, shareholders had a tough run over the longer term, too, with a drop of 35% in the last three years. Furthermore, it's down 38% in about a quarter. That's not much fun for holders.

With the stock having lost 19% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Check out our latest analysis for SRT Marine Systems

Because SRT Marine Systems 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

In just one year SRT Marine Systems saw its revenue fall by 23%. That looks pretty grim, at a glance. The stock price has languished lately, falling 44% in a year. What would you expect when revenue is falling, and it doesn't make a profit? We think most holders must believe revenue growth will improve, or else costs will decline.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

If you are thinking of buying or selling SRT Marine Systems stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While the broader market gained around 4.6% in the last year, SRT Marine Systems shareholders lost 44%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 4% 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. 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. Even so, be aware that SRT Marine Systems is showing 2 warning signs in our investment analysis , you should know about...

We will like SRT Marine Systems better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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