Stock Analysis

If You Had Bought Townsquare Media (NYSE:TSQ) Shares Three Years Ago You'd Have Earned 55% Returns

  •  Updated
NYSE:TSQ
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You can receive the average market return by buying a low-cost index fund. But you can make superior returns by picking better-than average stocks. Notably, the Townsquare Media, Inc. (NYSE:TSQ) share price has gained 55% in three years, which is better than the average market return. More recently the stock has gained 6.6% in a year, which isn't too bad.

See our latest analysis for Townsquare Media

Because Townsquare Media 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Townsquare Media actually saw its revenue drop by 0.6% per year over three years. The revenue growth might be lacking but the share price has gained 16% each year in that time. Unless the company is going to make profits soon, we would be pretty cautious about it.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

earnings-and-revenue-growth
NYSE:TSQ Earnings and Revenue Growth February 10th 2021

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between Townsquare Media's total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Townsquare Media's TSR of 73% for the 3 years exceeded its share price return, because it has paid dividends.

A Different Perspective

Townsquare Media shareholders are up 8.4% for the year. But that was short of the market average. The silver lining is that the gain was actually better than the average annual return of 3% per year over five year. It is possible that returns will improve along with the business fundamentals. 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. Case in point: We've spotted 1 warning sign for Townsquare Media you should be aware of.

But note: Townsquare Media 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 US exchanges.

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