U.S. markets closed
  • S&P Futures

    3,754.25
    -11.25 (-0.30%)
     
  • Dow Futures

    30,806.00
    -72.00 (-0.23%)
     
  • Nasdaq Futures

    12,395.75
    -59.25 (-0.48%)
     
  • Russell 2000 Futures

    2,131.40
    -13.10 (-0.61%)
     
  • Crude Oil

    64.39
    +0.56 (+0.88%)
     
  • Gold

    1,691.20
    -9.50 (-0.56%)
     
  • Silver

    25.25
    -0.21 (-0.81%)
     
  • EUR/USD

    1.1967
    -0.0011 (-0.10%)
     
  • 10-Yr Bond

    1.5500
    +0.0800 (+5.44%)
     
  • Vix

    28.57
    +1.90 (+7.12%)
     
  • GBP/USD

    1.3900
    +0.0006 (+0.04%)
     
  • USD/JPY

    107.9160
    -0.0600 (-0.06%)
     
  • BTC-USD

    47,237.20
    -4,008.63 (-7.82%)
     
  • CMC Crypto 200

    944.44
    -42.77 (-4.33%)
     
  • FTSE 100

    6,650.88
    -24.59 (-0.37%)
     
  • Nikkei 225

    28,359.11
    -571.00 (-1.97%)
     

If You Had Bought Teekay's (NYSE:TK) Shares Three Years Ago You Would Be Down 76%

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

While it may not be enough for some shareholders, we think it is good to see the Teekay Corporation (NYSE:TK) share price up 13% in a single quarter. But only the myopic could ignore the astounding decline over three years. Indeed, the share price is down a whopping 76% in the last three years. Arguably, the recent bounce is to be expected after such a bad drop. Of course the real question is whether the business can sustain a turnaround.

Check out our latest analysis for Teekay

Given that Teekay didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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, Teekay saw its revenue grow by 4.0% per year, compound. Given it's losing money in pursuit of growth, we are not really impressed with that. But the share price crash at 21% per year does seem a bit harsh! We generally don't try to 'catch the falling knife'. Before considering a purchase, take a look at the losses the company is racking up.

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

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

This free interactive report on Teekay's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Teekay shareholders are down 49% for the year, but the market itself is up 24%. 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 9% per year over five years. We realise that Baron Rothschild 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. For instance, we've identified 2 warning signs for Teekay (1 is potentially serious) that you should be aware of.

Of course Teekay may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.