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Did You Manage To Avoid Carrols Restaurant Group's (NASDAQ:TAST) Painful 64% Share Price Drop?

Simply Wall St

If you love investing in stocks you're bound to buy some losers. But the long term shareholders of Carrols Restaurant Group, Inc. (NASDAQ:TAST) have had an unfortunate run in the last three years. Sadly for them, the share price is down 64% in that time. The more recent news is of little comfort, with the share price down 41% in a year. The falls have accelerated recently, with the share price down 25% in the last three months.

Check out our latest analysis for Carrols Restaurant Group

Carrols Restaurant Group wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last three years, Carrols Restaurant Group saw its revenue grow by 12% per year, compound. That's a pretty good rate of top-line growth. So some shareholders would be frustrated with the compound loss of 29% per year. The market must have had really high expectations to be disappointed with this progress. So this is one stock that might be worth investigating further, or even adding to your watchlist.

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

NasdaqGS:TAST Income Statement, January 16th 2020

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. If you are thinking of buying or selling Carrols Restaurant Group stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

Investors in Carrols Restaurant Group had a tough year, with a total loss of 41%, against a market gain of about 27%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 6.7% over the last half decade. 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. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 2 warning signs we've spotted with Carrols Restaurant Group .

Carrols Restaurant Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with 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.

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.