Stock Analysis

How Much Did AgroFresh Solutions'(NASDAQ:AGFS) Shareholders Earn From Share Price Movements Over The Last Three Years?

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NasdaqGS:AGFS
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If you love investing in stocks you're bound to buy some losers. But the last three years have been particularly tough on longer term AgroFresh Solutions, Inc. (NASDAQ:AGFS) shareholders. Regrettably, they have had to cope with a 69% drop in the share price over that period. More recently, the share price has dropped a further 9.2% in a month.

See our latest analysis for AgroFresh Solutions

Given that AgroFresh Solutions 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. Shareholders of unprofitable companies usually expect strong 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 the last three years, AgroFresh Solutions' revenue dropped 0.4% per year. That is not a good result. The share price decline of 19% compound, over three years, is understandable given the company doesn't have profits to boast of, and revenue is moving in the wrong direction. Having said that, if growth is coming in the future, now may be the low ebb for the company. We'd be pretty wary of this one until it makes a profit, because we don't specialize in finding turnaround situations.

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

earnings-and-revenue-growth
NasdaqGS:AGFS Earnings and Revenue Growth January 4th 2021

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

Investors in AgroFresh Solutions had a tough year, with a total loss of 15%, against a market gain of about 24%. 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. However, the loss over the last year isn't as bad as the 10% per annum loss investors have suffered over the last half decade. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. 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. For example, we've discovered 1 warning sign for AgroFresh Solutions that you should be aware of before investing here.

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.

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