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If You Had Bought Inspired Entertainment's (NASDAQ:INSE) Shares Three Years Ago You Would Be Down 61%

Simply Wall St
·3 min read

This month, we saw the Inspired Entertainment, Inc. (NASDAQ:INSE) up an impressive 61%. Meanwhile over the last three years the stock has dropped hard. Regrettably, the share price slid 61% in that period. So it is really good to see an improvement. The rise has some hopeful, but turnarounds are often precarious.

Check out our latest analysis for Inspired Entertainment

Inspired Entertainment 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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.

Over three years, Inspired Entertainment grew revenue at 8.5% per year. That's a fairly respectable growth rate. So some shareholders would be frustrated with the compound loss of 17% per year. The market must have had really high expectations to be disappointed with this progress. It would be well worth taking a closer look at the company, to determine growth trends (and balance sheet strength).

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).


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

A Different Perspective

Inspired Entertainment shareholders are down 30% for the year, but the broader market is up 23%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Shareholders have lost 17% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. Although Baron Rothschild famously said to "buy when there's blood in the streets, even if the blood is your own", he also focusses on high quality stocks with solid prospects. It's always interesting to track share price performance over the longer term. But to understand Inspired Entertainment better, we need to consider many other factors. For example, we've discovered 3 warning signs for Inspired Entertainment that you should be aware of before investing here.

We will like Inspired Entertainment better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, 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.

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@simplywallst.com.