Lands' End (NASDAQ:LE) investors are sitting on a loss of 56% if they invested five years ago
We think intelligent long term investing is the way to go. But along the way some stocks are going to perform badly. For example the Lands' End, Inc. (NASDAQ:LE) share price dropped 56% over five years. That's not a lot of fun for true believers. And it's not just long term holders hurting, because the stock is down 52% in the last year. Furthermore, it's down 26% in about a quarter. That's not much fun for holders.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
View our latest analysis for Lands' End
Because Lands' End 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. 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 five years, Lands' End grew its revenue at 3.2% per year. That's far from impressive given all the money it is losing. It's likely this weak growth has contributed to an annualised return of 9% for the last five years. We'd want to see proof that future revenue growth is likely to be significantly stronger before getting too interested in Lands' End. When a stock falls hard like this, some investors like to add the company to a watchlist (in case the business recovers, longer term).
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
Take a more thorough look at Lands' End's financial health with this free report on its balance sheet.
A Different Perspective
While the broader market lost about 7.5% in the twelve months, Lands' End shareholders did even worse, losing 52%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 9% over the last half decade. 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. It's always interesting to track share price performance over the longer term. But to understand Lands' End better, we need to consider many other factors. For instance, we've identified 2 warning signs for Lands' End that you should be aware of.
Of course Lands' End 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.
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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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