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Did Changing Sentiment Drive Teligent's (NASDAQ:TLGT) Share Price Down A Disastrous 96%?

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·3 min read
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Long term investing works well, but it doesn't always work for each individual stock. It hits us in the gut when we see fellow investors suffer a loss. For example, we sympathize with anyone who was caught holding Teligent, Inc. (NASDAQ:TLGT) during the five years that saw its share price drop a whopping 96%. We also note that the stock has performed poorly over the last year, with the share price down 75%. Furthermore, it's down 41% in about a quarter. That's not much fun for holders.

We really feel for shareholders in this scenario. It's a good reminder of the importance of diversification, and it's worth keeping in mind there's more to life than money, anyway.

Check out our latest analysis for Teligent

Teligent isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over five years, Teligent grew its revenue at 12% per year. That's a fairly respectable growth rate. So the stock price fall of 48% per year seems pretty steep. The market can be a harsh master when your company is losing money and revenue growth disappoints.

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

NasdaqGS:TLGT Income Statement, February 5th 2020
NasdaqGS:TLGT Income Statement, February 5th 2020

If you are thinking of buying or selling Teligent stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While the broader market gained around 23% in the last year, Teligent shareholders lost 75%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 48% per year over five years. We realise that Buffett has said investors should 'buy when there is blood on the streets', but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand Teligent better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Teligent you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can 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.

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.