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Some N1 Holdings (ASX:N1H) Shareholders Have Copped A Big 53% Share Price Drop

Simply Wall St

While it may not be enough for some shareholders, we think it is good to see the N1 Holdings Limited (ASX:N1H) share price up 26% in a single quarter. Meanwhile over the last three years the stock has dropped hard. In that time, the share price dropped 53%. So the improvement may be a real relief to some. The rise has some hopeful, but turnarounds are often precarious.

See our latest analysis for N1 Holdings

Because N1 Holdings 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last three years N1 Holdings saw its revenue shrink by 1.6% per year. That is not a good result. With revenue in decline, and profit but a dream, we can understand why the share price has been declining at 22% per year. Having said that, if growth is coming in the future, now may be the low ebb for the company. We don't generally like to own companies that lose money and can't grow revenues. But any company is worth looking at when it makes a maiden profit.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

ASX:N1H Income Statement, March 19th 2020

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

N1 Holdings shareholders may not have made money over the last year, but their total loss of 7.8% isn't as bad as the market loss of around 7.8%. The one-year return is also not as bad as the 22% per annum loss investors have suffered over the last three years. It is of course not much comfort to know that the losses have slowed. Shareholders will be hoping for a proper turnaround, no doubt. It's always interesting to track share price performance over the longer term. But to understand N1 Holdings better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for N1 Holdings you should be aware of, and 2 of them make us uncomfortable.

Of course N1 Holdings 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 AU exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.