While it may not be enough for some shareholders, we think it is good to see the Amtech Systems, Inc. (NASDAQ:ASYS) share price up 13% in a single quarter. But that doesn’t change the fact that the returns over the last half decade have been disappointing. Indeed, the share price is down 60% in the period. So we’re hesitant to put much weight behind the short term increase. Of course, this could be the start of a turnaround.
Amtech Systems 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. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over five years, Amtech Systems grew its revenue at 27% per year. That’s well above most other pre-profit companies. In contrast, the share price is has averaged a loss of 17% per year – that’s quite disappointing. It’s safe to say investor expectations are more grounded now. Given the revenue growth we’d consider the stock to be quite an interesting prospect if the company has a clear path to profitability.
The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.
If you are thinking of buying or selling Amtech Systems stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Amtech Systems shareholders are down 37% for the year, but the market itself is up 3.9%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year’s performance caps off a bad run, with the shareholders facing a total loss of 17% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
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.
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 firstname.lastname@example.org. 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.