Adlabs Entertainment Limited (NSE:ADLABS) shareholders will doubtless be very grateful to see the share price up 38% in the last month. But the last three years have seen a terrible decline. The share price has sunk like a leaky ship, down 96% in that time. So it sure is nice to see a big of an improvement. Of course the real question is whether the business can sustain a turnaround.
While a drop like that is definitely a body blow, money isn't as important as health and happiness.
Adlabs Entertainment isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
This free interactive report on Adlabs Entertainment's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Over the last year, Adlabs Entertainment shareholders took a loss of 78%. In contrast the market gained about 6.4%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Shareholders have lost 67% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IN exchanges.
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