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Did Changing Sentiment Drive creditshelf's (ETR:CSQ) Share Price Down By 21%?

Simply Wall St

Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Unfortunately the creditshelf Aktiengesellschaft (ETR:CSQ) share price slid 21% over twelve months. That's disappointing when you consider the market returned 14%. creditshelf may have better days ahead, of course; we've only looked at a one year period. The last week also saw the share price slip down another 7.1%. However, this move may have been influenced by the broader market, which fell 3.7% in that time.

Check out our latest analysis for creditshelf

creditshelf isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last twelve months, creditshelf increased its revenue by 53%. That's a strong result which is better than most other loss making companies. The share price drop of 21% over twelve months would be considered disappointing by many, so you might argue the company is getting little credit for its impressive revenue growth. Prima facie, revenue growth like that should be a good thing, so it's worth checking whether losses have stabilized. Our monkey brains haven't evolved to think exponentially, so humans do tend to underestimate companies that have exponential growth.

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

XTRA:CSQ Income Statement, February 1st 2020

Take a more thorough look at creditshelf's financial health with this free report on its balance sheet.

A Different Perspective

Given that the market gained 14% in the last year, creditshelf shareholders might be miffed that they lost 21%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. Putting aside the last twelve months, it's good to see the share price has rebounded by 5.0%, in the last ninety days. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - creditshelf has 2 warning signs we think you should be aware of.

We will like creditshelf better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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

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. Thank you for reading.