Astronics (NASDAQ:ATRO) shareholders have endured a 57% loss from investing in the stock three years ago
While it may not be enough for some shareholders, we think it is good to see the Astronics Corporation (NASDAQ:ATRO) share price up 11% in a single quarter. But over the last three years we've seen a quite serious decline. In that time, the share price dropped 57%. So the improvement may be a real relief to some. The rise has some hopeful, but turnarounds are often precarious.
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.
See our latest analysis for Astronics
Astronics isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last three years Astronics saw its revenue shrink by 25% per year. That's definitely a weaker result than most pre-profit companies report. With no profits and falling revenue it is no surprise that investors have been dumping the stock, pushing the price down by 16% per year over that time. When revenue is dropping, and losses are still costing, and the share price sinking fast, it's fair to ask if something is remiss. After losing money on a declining business with falling stock price, we always consider whether eager bagholders are still offering us a reasonable exit price.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
This free interactive report on Astronics' balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Investors in Astronics had a tough year, with a total loss of 22%, against a market gain of about 8.4%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. 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. 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Astronics you should be aware of, and 1 of them makes us a bit uncomfortable.
But note: Astronics 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 US exchanges.
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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.
