Those Who Purchased BIO-key International (NASDAQ:BKYI) Shares Three Years Ago Have A 74% Loss To Show For It

It is a pleasure to report that the BIO-key International, Inc. (NASDAQ:BKYI) is up 66% in the last quarter. But that doesn't change the fact that the returns over the last three years have been stomach churning. To wit, the share price sky-dived 74% in that time. So it's about time shareholders saw some gains. The thing to think about is whether the business has really turned around.

Check out our latest analysis for BIO-key International

Given that BIO-key International 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. 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.

Over three years, BIO-key International grew revenue at 2.5% per year. Given it's losing money in pursuit of growth, we are not really impressed with that. But the share price crash at 36% per year does seem a bit harsh! We generally don't try to 'catch the falling knife'. Of course, revenue growth is nice but generally speaking the lower the profits, the riskier the business - and this business isn't making steady profits.

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

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

A Different Perspective

While the broader market gained around 20% in the last year, BIO-key International shareholders lost 36%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 21% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand BIO-key International better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 6 warning signs for BIO-key International (of which 1 is a bit concerning!) you should know about.

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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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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