The Town Sports International Holdings (NASDAQ:CLUB) Share Price Is Down 73% So Some Shareholders Are Rather Upset

It is a pleasure to report that the Town Sports International Holdings, Inc. (NASDAQ:CLUB) is up 45% in the last quarter. But that doesn't change the fact that the returns over the last year have been stomach churning. Indeed, the share price is down a whopping 73% in the last year. Arguably, the recent bounce is to be expected after such a bad drop. The important thing is whether the company can turn it around, longer term.

See our latest analysis for Town Sports International Holdings

Because Town Sports International Holdings is loss-making, 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 does expect good top-line growth.

In the last twelve months, Town Sports International Holdings increased its revenue by 8.4%. While that may seem decent it isn't great considering the company is still making a loss. Even so you could argue that it's surprising that the share price has tanked 73%. Clearly the market was expecting better, and this may blow out projections of profitability. But if it will make money, albeit later than previously believed, this could be an opportunity.

You can see below how revenue has changed over time.

It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. You can see what analysts are predicting for Town Sports International Holdings in this interactive graph of future profit estimates.

A Different Perspective

Town Sports International Holdings shareholders are down 73% for the year, but the market itself is up 14%. 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 21% per year over five years. We realise that Buffett has said investors should 'buy when there is blood on the streets', but we caution that investors should first be sure they are buying a high quality businesses. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.