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Even the best investor on earth makes unsuccessful investments. But serious investors should think long and hard about avoiding extreme losses. It must have been painful to be a KLX Energy Services Holdings, Inc. (NASDAQ:KLXE) shareholder over the last year, since the stock price plummeted 95% in that time. While some investors are willing to stomach this sort of loss, they are usually professionals who spread their bets thinly. KLX Energy Services Holdings may have better days ahead, of course; we've only looked at a one year period. The falls have accelerated recently, with the share price down 81% 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.
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.
Because KLX Energy Services Holdings made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong 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.
KLX Energy Services Holdings grew its revenue by 9.8% over the last year. While that may seem decent it isn't great considering the company is still making a loss. Even so you could argue that it's surprising that the share price has tanked 95%. We'd venture this growth was too low to give holders confidence that profitability is on the horizon. But if it will make money, albeit later than previously believed, this could be an opportunity.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. So it makes a lot of sense to check out what analysts think KLX Energy Services Holdings will earn in the future (free profit forecasts).
A Different Perspective
KLX Energy Services Holdings shareholders are down 95% for the year, even worse than the market loss of 1.1%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. The share price decline has continued throughout the most recent three months, down 81%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand KLX Energy Services Holdings better, we need to consider many other factors. For example, we've discovered 4 warning signs for KLX Energy Services Holdings that you should be aware of before investing here.
KLX Energy Services Holdings 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 email@example.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.