Select Energy Services (NYSE:WTTR) Share Prices Have Dropped 77% In The Last Three Years

As an investor, mistakes are inevitable. But really bad investments should be rare. So consider, for a moment, the misfortune of Select Energy Services, Inc. (NYSE:WTTR) investors who have held the stock for three years as it declined a whopping 77%. That would be a disturbing experience. The more recent news is of little comfort, with the share price down 55% in a year. Unfortunately the share price momentum is still quite negative, with prices down 14% in thirty days.

Check out our latest analysis for Select Energy Services

Because Select Energy Services made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last three years, Select Energy Services saw its revenue grow by 7.5% per year, compound. That's not a very high growth rate considering it doesn't make profits. Nonetheless, it's fair to say the rapidly declining share price (down 21%, compound, over three years) suggests the market is very disappointed with this level of growth. While we're definitely wary of the stock, after that kind of performance, it could be an over-reaction. Before considering a purchase, take a look at the losses the company is racking up.

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

Select Energy Services shareholders are down 55% for the year, but the broader market is up 24%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. The three-year loss of 21% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. Although Baron Rothschild famously said to "buy when there's blood in the streets, even if the blood is your own", he also focusses on high quality stocks with solid prospects. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - Select Energy Services has 2 warning signs we think you should be aware of.

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.

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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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