Further weakness as Tatry mountain resorts (BSSE:1TMR001E) drops 10% this week, taking three-year losses to 32%

In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. But its virtually certain that sometimes you will buy stocks that fall short of the market average returns. Unfortunately, that's been the case for longer term Tatry mountain resorts, a.s. (BSSE:1TMR001E) shareholders, since the share price is down 32% in the last three years, falling well short of the market decline of around 8.5%. Shareholders have had an even rougher run lately, with the share price down 16% in the last 90 days. But this could be related to the weak market, which is down 11% in the same period.

Since Tatry mountain resorts has shed €17m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

See our latest analysis for Tatry mountain resorts

We don't think that Tatry mountain resorts' modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

Over three years, Tatry mountain resorts grew revenue at 16% per year. That's a fairly respectable growth rate. Shareholders have seen the share price fall at 10% per year, for three years. This implies the market had higher expectations of Tatry mountain resorts. With revenue growing at a solid clip, now might be the time to focus on the possibility that it will have a brighter future.

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

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

We're pleased to report that Tatry mountain resorts shareholders have received a total shareholder return of 5.1% over one year. That certainly beats the loss of about 4% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. 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. Even so, be aware that Tatry mountain resorts is showing 3 warning signs in our investment analysis , and 2 of those shouldn't be ignored...

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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