U.S. markets closed
  • S&P 500

    3,351.76
    +53.30 (+1.62%)
     
  • Dow 30

    27,584.71
    +410.75 (+1.51%)
     
  • Nasdaq

    11,117.53
    +203.96 (+1.87%)
     
  • Russell 2000

    1,513.59
    +38.68 (+2.62%)
     
  • Crude Oil

    40.59
    +0.34 (+0.84%)
     
  • Gold

    1,884.60
    +18.30 (+0.98%)
     
  • Silver

    23.82
    +0.72 (+3.13%)
     
  • EUR/USD

    1.1674
    +0.0039 (+0.34%)
     
  • 10-Yr Bond

    0.6630
    +0.0040 (+0.61%)
     
  • GBP/USD

    1.2835
    +0.0091 (+0.71%)
     
  • USD/JPY

    105.4820
    -0.0640 (-0.06%)
     
  • BTC-USD

    10,876.19
    +97.38 (+0.90%)
     
  • CMC Crypto 200

    224.21
    +0.29 (+0.13%)
     
  • FTSE 100

    5,927.93
    +85.26 (+1.46%)
     
  • Nikkei 225

    23,511.62
    +307.00 (+1.32%)
     

Reflecting on NexTier Oilfield Solutions' (NYSE:NEX) Share Price Returns Over The Last Three Years

Simply Wall St

As every investor would know, not every swing hits the sweet spot. But you have a problem if you face massive losses more than once in a while. So consider, for a moment, the misfortune of NexTier Oilfield Solutions Inc. (NYSE:NEX) investors who have held the stock for three years as it declined a whopping 80%. That might cause some serious doubts about the merits of the initial decision to buy the stock, to put it mildly. And over the last year the share price fell 46%, so we doubt many shareholders are delighted. On top of that, the share price is down 12% in the last week.

Check out our latest analysis for NexTier Oilfield Solutions

NexTier Oilfield Solutions wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. 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.

In the last three years, NexTier Oilfield Solutions saw its revenue grow by 13% per year, compound. That's a pretty good rate of top-line growth. So it seems unlikely the 22% share price drop (each year) is entirely about the revenue. More likely, the market was spooked by the cost of that revenue. If you buy into companies that lose money then you always risk losing money yourself. Just don't lose the lesson.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

earnings-and-revenue-growth
earnings-and-revenue-growth

NexTier Oilfield Solutions is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

Over the last year, NexTier Oilfield Solutions shareholders took a loss of 46%. In contrast the market gained about 20%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Shareholders have lost 22% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. Although Baron Rothschild famously said to "buy when there's blood in the streets, even if the blood is your own", he also focusses on high quality stocks with solid prospects. 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 example, we've discovered 3 warning signs for NexTier Oilfield Solutions (1 is significant!) that you should be aware of before investing here.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.