Did Changing Sentiment Drive Endurance International Group Holdings's (NASDAQ:EIGI) Share Price Down A Painful 76%?

By
Simply Wall St
Published
November 04, 2019
NasdaqGS:EIGI

Some stocks are best avoided. We really hate to see fellow investors lose their hard-earned money. Spare a thought for those who held Endurance International Group Holdings, Inc. (NASDAQ:EIGI) for five whole years - as the share price tanked 76%. And it's not just long term holders hurting, because the stock is down 61% in the last year. Shareholders have had an even rougher run lately, with the share price down 19% in the last 90 days. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.

Check out our latest analysis for Endurance International Group Holdings

Given that Endurance International Group Holdings 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over five years, Endurance International Group Holdings grew its revenue at 13% per year. That's a pretty good rate for a long time period. So it is unexpected to see the stock down 25% per year in the last five years. The market can be a harsh master when your company is losing money and revenue growth disappoints.

The graphic below depicts how revenue has changed over time.

NasdaqGS:EIGI Income Statement, November 4th 2019
NasdaqGS:EIGI Income Statement, November 4th 2019

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

While the broader market gained around 14% in the last year, Endurance International Group Holdings shareholders lost 61%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 25% per year over five years. We realise that Buffett has said investors should 'buy when there is blood on the streets', but we caution that investors should first be sure they are buying a high quality businesses. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.

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