Loss-making Parkmead Group (LON:PMG) sheds a further UK£6.3m, taking total shareholder losses to 34% over 3 years
As an investor its worth striving to ensure your overall portfolio beats the market average. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. We regret to report that long term The Parkmead Group plc (LON:PMG) shareholders have had that experience, with the share price dropping 34% in three years, versus a market decline of about 11%. More recently, the share price has dropped a further 14% in a month. Importantly, this could be a market reaction to the recently released financial results. You can check out the latest numbers in our company report.
If the past week is anything to go by, investor sentiment for Parkmead Group isn't positive, so let's see if there's a mismatch between fundamentals and the share price.
See our latest analysis for Parkmead Group
Parkmead Group isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. 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 the last three years, Parkmead Group's revenue dropped 35% per year. That's definitely a weaker result than most pre-profit companies report. With revenue in decline, the share price decline of 10% per year is hardly undeserved. It would probably be worth asking whether the company can fund itself to profitability. The company will need to return to revenue growth as quickly as possible, if it wants to see some enthusiasm from investors.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
This free interactive report on Parkmead Group's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Parkmead Group shareholders gained a total return of 8.1% during the year. But that return falls short of the market. But at least that's still a gain! Over five years the TSR has been a reduction of 5% per year, over five years. So this might be a sign the business has turned its fortunes around. 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. Even so, be aware that Parkmead Group is showing 3 warning signs in our investment analysis , you should know about...
But note: Parkmead Group 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 GB exchanges.
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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