The past five years for Odyssey Marine Exploration (NASDAQ:OMEX) investors has not been profitable
While not a mind-blowing move, it is good to see that the Odyssey Marine Exploration, Inc. (NASDAQ:OMEX) share price has gained 16% in the last three months. But don't envy holders -- looking back over 5 years the returns have been really bad. Indeed, the share price is down 53% in the period. So we're not so sure if the recent bounce should be celebrated. However, in the best case scenario (far from fait accompli), this improved performance might be sustained.
So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.
View our latest analysis for Odyssey Marine Exploration
We don't think that Odyssey Marine Exploration's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.
Over half a decade Odyssey Marine Exploration reduced its trailing twelve month revenue by 23% for each year. That puts it in an unattractive cohort, to put it mildly. Arguably, the market has responded appropriately to this business performance by sending the share price down 9% (annualized) in the same time period. We don't generally like to own companies that lose money and don't grow revenues. You might be better off spending your money on a leisure activity. You'd want to research this company pretty thoroughly before buying, it looks a bit too risky for us.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
It is of course excellent to see how Odyssey Marine Exploration has grown profits over the years, but the future is more important for shareholders. This free interactive report on Odyssey Marine Exploration's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
It's nice to see that Odyssey Marine Exploration shareholders have received a total shareholder return of 24% over the last year. Notably the five-year annualised TSR loss of 9% per year compares very unfavourably with the recent share price performance. This makes us a little wary, but the business might have turned around its fortunes. 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. For instance, we've identified 6 warning signs for Odyssey Marine Exploration (2 are potentially serious) that you should be aware of.
But note: Odyssey Marine Exploration 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 American 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.
