Investors one-year losses grow to 46% as the stock sheds US$86m this past week
The simplest way to benefit from a rising market is to buy an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. That downside risk was realized by Cyxtera Technologies, Inc. (NASDAQ:CYXT) shareholders over the last year, as the share price declined 46%. That's disappointing when you consider the market declined 17%. Because Cyxtera Technologies hasn't been listed for many years, the market is still learning about how the business performs. It's down 64% in about a quarter.
With the stock having lost 8.7% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.
Check out our latest analysis for Cyxtera Technologies
Because Cyxtera Technologies 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. 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 twelve months, Cyxtera Technologies increased its revenue by 4.2%. While that may seem decent it isn't great considering the company is still making a loss. Given this lacklustre revenue growth, the share price drop of 46% seems pretty appropriate. In a hot market it's easy to forget growth is the life-blood of a loss making company. But if you buy a loss making company then you could become a loss making investor.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
Take a more thorough look at Cyxtera Technologies' financial health with this free report on its balance sheet.
A Different Perspective
Cyxtera Technologies shareholders are down 46% for the year, even worse than the market loss of 17%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. Notably, the loss over the last year isn't as bad as the 64% drop in the last three months. This probably signals that the business has recently disappointed shareholders - it will take time to win them back. It's always interesting to track share price performance over the longer term. But to understand Cyxtera Technologies better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Cyxtera Technologies you should know about.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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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.
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