If You Had Bought Natural Gas Services Group's (NYSE:NGS) Shares Three Years Ago You Would Be Down 60%

Natural Gas Services Group, Inc. (NYSE:NGS) shareholders should be happy to see the share price up 10% in the last month. But over the last three years we've seen a quite serious decline. Regrettably, the share price slid 60% in that period. Some might say the recent bounce is to be expected after such a bad drop. While many would remain nervous, there could be further gains if the business can put its best foot forward.

See our latest analysis for Natural Gas Services Group

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During five years of share price growth, Natural Gas Services Group moved from a loss to profitability. That would generally be considered a positive, so we are surprised to see the share price is down. So given the share price is down it's worth checking some other metrics too.

Revenue is actually up 5.6% over the three years, so the share price drop doesn't seem to hinge on revenue, either. It's probably worth investigating Natural Gas Services Group further; while we may be missing something on this analysis, there might also be an opportunity.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

We know that Natural Gas Services Group has improved its bottom line lately, but what does the future have in store? This free report showing analyst forecasts should help you form a view on Natural Gas Services Group

A Different Perspective

Investors in Natural Gas Services Group had a tough year, with a total loss of 8.3%, against a market gain of about 30%. 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. Unfortunately, longer term shareholders are suffering worse, given the loss of 7% doled out over the last five years. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. It's always interesting to track share price performance over the longer term. But to understand Natural Gas Services Group better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Natural Gas Services Group .

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

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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. 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.
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