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Would Shareholders Who Purchased Build-A-Bear Workshop's (NYSE:BBW) Stock Five Years Be Happy With The Share price Today?

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·3 min read
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  • BBW

Build-A-Bear Workshop, Inc. (NYSE:BBW) shareholders will doubtless be very grateful to see the share price up 45% in the last quarter. But that can't change the reality that over the longer term (five years), the returns have been really quite dismal. In that time the share price has delivered a rude shock to holders, who find themselves down 61% after a long stretch. Some might say the recent bounce is to be expected after such a bad drop. Of course, this could be the start of a turnaround.

View our latest analysis for Build-A-Bear Workshop

Because Build-A-Bear Workshop 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. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last five years Build-A-Bear Workshop saw its revenue shrink by 5.4% per year. That's not what investors generally want to see. With neither profit nor revenue growth, the loss of 10% per year doesn't really surprise us. We don't think anyone is rushing to buy this stock. Not that many investors like to invest in companies that are losing money and not growing revenue.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

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

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. If you are thinking of buying or selling Build-A-Bear Workshop stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

It's good to see that Build-A-Bear Workshop has rewarded shareholders with a total shareholder return of 56% in the last twelve months. Notably the five-year annualised TSR loss of 10% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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. Even so, be aware that Build-A-Bear Workshop is showing 3 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

Build-A-Bear Workshop is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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.