Investors might be losing patience for Brookdale Senior Living's (NYSE:BKD) increasing losses, as stock sheds 6.9% over the past week

When you buy and hold a stock for the long term, you definitely want it to provide a positive return. Better yet, you'd like to see the share price move up more than the market average. But Brookdale Senior Living Inc. (NYSE:BKD) has fallen short of that second goal, with a share price rise of 74% over five years, which is below the market return. The last year has been disappointing, with the stock price down 12% in that time.

Although Brookdale Senior Living has shed US$86m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

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Because Brookdale Senior Living 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. 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 would hope for good top-line growth to make up for the lack of earnings.

In the last 5 years Brookdale Senior Living saw its revenue shrink by 2.1% per year. The falling revenue is arguably somewhat reflected in the lacklustre return of 12% per year over that time. Arguably that's not bad given the soft revenue and loss-making position. Of course, a closer look at the bottom line - and any available analyst forecasts - could reveal an opportunity (if they point to future growth).

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

This free interactive report on Brookdale Senior Living's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

While the broader market gained around 1.4% in the last year, Brookdale Senior Living shareholders lost 12%. 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. Longer term investors wouldn't be so upset, since they would have made 12%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Brookdale Senior Living , and understanding them should be part of your investment process.

But note: Brookdale Senior Living may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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

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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.