While XTPL (WSE:XTP) shareholders have made 59% in 3 years, increasing losses might now be front of mind as stock sheds 10% this week

XTPL S.A. (WSE:XTP) shareholders might be concerned after seeing the share price drop 28% in the last quarter. But over three years, the returns would have left most investors smiling To wit, the share price did better than an index fund, climbing 59% during that period.

Although XTPL has shed zł25m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

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Given that XTPL 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. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last 3 years XTPL saw its revenue grow at 35% per year. That's well above most pre-profit companies. The share price rise of 17% per year throughout that time is nice to see, and given the revenue growth, that gain seems somewhat justified. So now might be the perfect time to put XTPL on your radar. If the company is trending towards profitability then it could be very interesting.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Take a more thorough look at XTPL's financial health with this free report on its balance sheet .

A Different Perspective

Investors in XTPL had a tough year, with a total loss of 28%, against a market gain of about 2.2%. 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. On the bright side, long term shareholders have made money, with a gain of 6% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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. Case in point: We've spotted 3 warning signs for XTPL you should be aware of.

We will like XTPL better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) 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 Polish 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.