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Did Changing Sentiment Drive Nine Energy Service's (NYSE:NINE) Share Price Down A Painful 72%?

Simply Wall St

This week we saw the Nine Energy Service, Inc. (NYSE:NINE) share price climb by 16%. But that doesn't change the fact that the returns over the last year have been stomach churning. During that time the share price has plummeted like a stone, down 72%. So the rise may not be much consolation. The real question is whether the company can turn around its fortunes.

Check out our latest analysis for Nine Energy Service

Given that Nine Energy Service 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. When a company doesn't make profits, we'd generally expect to see good 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.

Nine Energy Service grew its revenue by 20% over the last year. That's definitely a respectable growth rate. Unfortunately, the market wanted something better, given it sent the share price 72% lower during the year. One fear might be that the company might be losing too much money and will need to raise more. It seems that the market has concerns about the future, because that share price action does not seem to reflect the revenue growth at all.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

NYSE:NINE Income Statement, December 16th 2019
NYSE:NINE Income Statement, December 16th 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

Given that the market gained 25% in the last year, Nine Energy Service shareholders might be miffed that they lost 72%. 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. With the stock down 8.0% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. Before spending more time on Nine Energy Service it might be wise to click here to see if insiders have been buying or selling shares.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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