Should Nortech Systems (NASDAQ:NSYS) Be Disappointed With Their 31% Profit?

Nortech Systems Incorporated (NASDAQ:NSYS) shareholders might be concerned after seeing the share price drop 15% in the last quarter. But looking back over the last year, the returns have actually been rather pleasing! To wit, it had solidly beat the market, up 31%.

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Check out our latest analysis for Nortech Systems

While Nortech Systems made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. Generally speaking, we’d consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

In the last year Nortech Systems saw its revenue grow by 4.2%. That’s not a very high growth rate considering it doesn’t make profits. The modest growth is probably largely reflected in the share price, which is up 31%. While not a huge gain tht seems pretty reasonable. It could be worth keeping an eye on this one, especially if growth accelerates.

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

NasdaqCM:NSYS Income Statement, May 22nd 2019
NasdaqCM:NSYS Income Statement, May 22nd 2019

We’re pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. It might be well worthwhile taking a look at our free report on Nortech Systems’s earnings, revenue and cash flow.

A Different Perspective

It’s good to see that Nortech Systems has rewarded shareholders with a total shareholder return of 31% in the last twelve months. There’s no doubt those recent returns are much better than the TSR loss of 2.6% per year over five years. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. Before forming an opinion on Nortech Systems you might want to consider these 3 valuation metrics.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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.