Stock Analysis
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Cadre Holdings' (NYSE:CDRE one-year decrease in earnings delivers investors with a 23% loss
It's easy to match the overall market return by buying an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Unfortunately the Cadre Holdings, Inc. (NYSE:CDRE) share price slid 24% over twelve months. That's disappointing when you consider the market declined 12%. Because Cadre Holdings hasn't been listed for many years, the market is still learning about how the business performs. Even worse, it's down 20% in about a month, which isn't fun at all. Importantly, this could be a market reaction to the recently released financial results. You can check out the latest numbers in our company report.
Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.
Check out our latest analysis for Cadre Holdings
We don't think that Cadre Holdings' 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.
Cadre Holdings grew its revenue by 7.1% over the last year. While that may seem decent it isn't great considering the company is still making a loss. Given this fairly low revenue growth (and lack of profits), it's not particularly surprising to see the stock down 24% in a year. It's important not to lose sight of the fact that profitless companies must grow. So remember, if you buy a profitless company then you risk being a profitless investor.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
Cadre Holdings shareholders are down 23% for the year (even including dividends), even worse than the market loss of 12%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 12% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand Cadre Holdings better, we need to consider many other factors. To that end, you should be aware of the 6 warning signs we've spotted with Cadre Holdings .
If you are like me, then you will not want to miss this free list of growing companies 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 American exchanges.
What are the risks and opportunities for Cadre Holdings?
Cadre Holdings, Inc. manufactures and distributes safety and survivability equipment that provides protection to users in hazardous or life-threatening situations in the United States and internationally.
Rewards
Trading at 31.8% below our estimate of its fair value
Earnings are forecast to grow 64.02% per year
Revenue grew by 7.1% over the past year
Risks
Shareholders have been diluted in the past year
Profit margins (1.3%) are lower than last year (3%)
Large one-off items impacting financial results
Has a high level of debt
Further research on
Cadre Holdings
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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.
About NYSE:CDRE
Cadre Holdings
Cadre Holdings, Inc. manufactures and distributes safety and survivability equipment that provides protection to users in hazardous or life-threatening situations in the United States and internationally.
Adequate balance sheet and fair value.
