Can You Imagine How Kraton's (NYSE:KRA) Shareholders Feel About The 79% Share Price Increase?
If you buy and hold a stock for many years, you'd hope to be making a profit. But more than that, you probably want to see it rise more than the market average. But Kraton Corporation (NYSE:KRA) has fallen short of that second goal, with a share price rise of 79% over five years, which is below the market return. Over the last twelve months the stock price has risen a very respectable 10%.
Check out our latest analysis for Kraton
Because Kraton 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. 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 5 years Kraton saw its revenue grow at 6.6% per year. That's a fairly respectable growth rate. While the share price has gained 12% per year for five years, that's hardly amazing considering the market also rose. Arguably, that means, the market (previously) expected stronger growth from the company.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
This free interactive report on Kraton's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Kraton provided a TSR of 10% over the last twelve months. But that was short of the market average. If we look back over five years, the returns are even better, coming in at 12% per year for five years. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. It's always interesting to track share price performance over the longer term. But to understand Kraton better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Kraton you should be aware of, and 1 of them makes us a bit uncomfortable.
But note: Kraton may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
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.
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