It hasn't been the best quarter for Infinera Corporation (NASDAQ:INFN) shareholders, since the share price has fallen 21% in that time. In contrast the stock is up over the last three years. In that time, it is up 34%, which isn't bad, but not amazing either.
Since the long term performance has been good but there's been a recent pullback of 5.4%, let's check if the fundamentals match the share price.
Given that Infinera 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over the last three years Infinera has grown its revenue at 18% annually. That's a very respectable growth rate. The annual gain of 10% over three years is better than nothing, but hardly impresses. So it's possible that expectations were elevated in the past, muting returns over three years. However, if you can reasonably expect profits in the next few years, this stock might belong on your watchlist.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
Infinera is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So it makes a lot of sense to check out what analysts think Infinera will earn in the future (free analyst consensus estimates)
A Different Perspective
Infinera shareholders are up 14% for the year. But that was short of the market average. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 2% endured over half a decade. So this might be a sign the business has turned its fortunes around. It's always interesting to track share price performance over the longer term. But to understand Infinera better, we need to consider many other factors. For example, we've discovered 3 warning signs for Infinera that you should be aware of before investing here.
Of course Infinera may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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.
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