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Flotek Industries (NYSE:FTK) Share Prices Have Dropped 78% In The Last Five Years

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Simply Wall St
·3 min read
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Long term investing works well, but it doesn't always work for each individual stock. We don't wish catastrophic capital loss on anyone. Spare a thought for those who held Flotek Industries, Inc. (NYSE:FTK) for five whole years - as the share price tanked 78%. More recently, the share price has dropped a further 26% in a month. Importantly, this could be a market reaction to the recently released financial results. You can check out the latest numbers in our company report.

Check out our latest analysis for Flotek Industries

Flotek Industries isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over half a decade Flotek Industries reduced its trailing twelve month revenue by 23% for each year. That's definitely a weaker result than most pre-profit companies report. So it's not that strange that the share price dropped 12% per year in that period. This kind of price performance makes us very wary, especially when combined with falling revenue. Ironically, that behavior could create an opportunity for the contrarian investor - but only if there are good reasons to predict a brighter future.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
earnings-and-revenue-growth

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. It might be well worthwhile taking a look at our free report on Flotek Industries' earnings, revenue and cash flow.

A Different Perspective

It's good to see that Flotek Industries has rewarded shareholders with a total shareholder return of 73% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 12% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Flotek Industries better, we need to consider many other factors. For instance, we've identified 4 warning signs for Flotek Industries (2 shouldn't be ignored) that you should be aware of.

Flotek Industries is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.