Some stocks are best avoided. We really hate to see fellow investors lose their hard-earned money. Spare a thought for those who held RigNet, Inc. (NASDAQ:RNET) for five whole years – as the share price tanked 73%. The silver lining is that the stock is up 2.9% in about a week.
Given that RigNet 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 expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Over half a decade RigNet reduced its trailing twelve month revenue by 5.8% for each year. While far from catastrophic that is not good. If a business loses money, you want it to grow, so no surprises that the share price has dropped 23% each year in that time. It takes a certain kind of mental fortitude (or recklessness) to buy shares in a company that loses money and doesn’t grow revenue. Fear of becoming a ‘bagholder’ may be keeping people away from this stock.
The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).
If you are thinking of buying or selling RigNet stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
We’re pleased to report that RigNet shareholders have received a total shareholder return of 4.0% over one year. There’s no doubt those recent returns are much better than the TSR loss of 23% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. If you would like to research RigNet in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of companies that have proven they can grow earnings.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 email@example.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.