Investors in TomTom (AMS:TOM2) from five years ago are still down 48%, even after 10% gain this past week

It's nice to see the TomTom N.V. (AMS:TOM2) share price up 10% in a week. But over the last half decade, the stock has not performed well. After all, the share price is down 48% in that time, significantly under-performing the market.

On a more encouraging note the company has added €62m to its market cap in just the last 7 days, so let's see if we can determine what's driven the five-year loss for shareholders.

See our latest analysis for TomTom

TomTom isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over half a decade TomTom reduced its trailing twelve month revenue by 4.0% for each year. That's not what investors generally want to see. The share price decline at a rate of 8% per year is disappointing. But it doesn't surprise given the falling revenue. It might be worth watching for signs of a turnaround - buyers are probably expecting one.

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

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

A Different Perspective

TomTom shareholders are down 22% for the year, but the market itself is up 25%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 8% 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. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with TomTom .

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.

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