U.S. Markets close in 1 hr
  • S&P 500

    3,963.58
    -62.54 (-1.55%)
     
  • Dow 30

    33,854.45
    -492.58 (-1.43%)
     
  • Nasdaq

    11,055.93
    -170.42 (-1.52%)
     
  • Russell 2000

    1,835.87
    -33.32 (-1.78%)
     
  • Crude Oil

    77.16
    +0.88 (+1.15%)
     
  • Gold

    1,739.10
    -14.90 (-0.85%)
     
  • Silver

    20.86
    -0.57 (-2.66%)
     
  • EUR/USD

    1.0342
    -0.0062 (-0.5999%)
     
  • 10-Yr Bond

    3.7070
    +0.0160 (+0.43%)
     
  • Vix

    22.14
    +1.64 (+8.00%)
     
  • GBP/USD

    1.1954
    -0.0136 (-1.1285%)
     
  • USD/JPY

    138.8740
    -0.2260 (-0.1625%)
     
  • BTC-USD

    16,232.54
    -323.03 (-1.95%)
     
  • CMC Crypto 200

    380.66
    +0.37 (+0.10%)
     
  • FTSE 100

    7,474.02
    -12.65 (-0.17%)
     
  • Nikkei 225

    28,162.83
    -120.20 (-0.42%)
     

Investors in LL Flooring Holdings (NYSE:LL) have unfortunately lost 82% over the last five years

Some stocks are best avoided. We don't wish catastrophic capital loss on anyone. Spare a thought for those who held LL Flooring Holdings, Inc. (NYSE:LL) for five whole years - as the share price tanked 82%. And some of the more recent buyers are probably worried, too, with the stock falling 63% in the last year. The falls have accelerated recently, with the share price down 34% in the last three months. While a drop like that is definitely a body blow, money isn't as important as health and happiness.

It's worthwhile assessing if the company's economics have been moving in lockstep with these underwhelming shareholder returns, or if there is some disparity between the two. So let's do just that.

See our latest analysis for LL Flooring Holdings

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

LL Flooring Holdings became profitable within the last five years. That would generally be considered a positive, so we are surprised to see the share price is down. Other metrics might give us a better handle on how its value is changing over time.

Revenue is actually up 2.5% over the time period. A more detailed examination of the revenue and earnings may or may not explain why the share price languishes; there could be an opportunity.

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

It is of course excellent to see how LL Flooring Holdings has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at LL Flooring Holdings' financial health with this free report on its balance sheet.

A Different Perspective

While the broader market lost about 22% in the twelve months, LL Flooring Holdings shareholders did even worse, losing 63%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 13% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand LL Flooring Holdings better, we need to consider many other factors. Take risks, for example - LL Flooring Holdings has 2 warning signs (and 1 which can't be ignored) we think you should know about.

We will like LL Flooring Holdings 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.

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

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here