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Did Changing Sentiment Drive Nuverra Environmental Solutions's (NYSEMKT:NES) Share Price Down A Worrying 67%?

Simply Wall St

Taking the occasional loss comes part and parcel with investing on the stock market. And there's no doubt that Nuverra Environmental Solutions, Inc. (NYSEMKT:NES) stock has had a really bad year. The share price has slid 67% in that time. We wouldn't rush to judgement on Nuverra Environmental Solutions because we don't have a long term history to look at. The falls have accelerated recently, with the share price down 53% in the last three months. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.

View our latest analysis for Nuverra Environmental Solutions

Because Nuverra Environmental Solutions is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. 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.

In just one year Nuverra Environmental Solutions saw its revenue fall by 3.7%. That looks pretty grim, at a glance. In the absence of profits, it's not unreasonable that the share price fell 67%. Having said that, if growth is coming in the future, the stock may have better days ahead. We have a natural aversion to companies that are losing money and shrinking revenue. But perhaps that is being too careful.

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

AMEX:NES Income Statement, August 7th 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 0.9% in the last year, Nuverra Environmental Solutions shareholders might be miffed that they lost 67%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 53% 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. If you would like to research Nuverra Environmental Solutions in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.

We will like Nuverra Environmental Solutions 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 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.