Telos (NASDAQ:TLS shareholders incur further losses as stock declines 16% this week, taking one-year losses to 72%
Telos Corporation (NASDAQ:TLS) shareholders will doubtless be very grateful to see the share price up 49% in the last month. But that isn't much consolation for the painful drop we've seen in the last year. Indeed, the share price is down a whopping 72% in the last year. It's not uncommon to see a bounce after a drop like that. The important thing is whether the company can turn it around, longer term.
With the stock having lost 16% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.
Check out our latest analysis for Telos
Because Telos 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. 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 just one year Telos saw its revenue fall by 15%. That's not what investors generally want to see. The share price fall of 72% in a year tells the story. That's a stern reminder that profitless companies need to grow the top line, at the very least. But markets do over-react, so there opportunity for investors who are willing to take the time to dig deeper and understand the business.
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's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. If you are thinking of buying or selling Telos stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
Given that the market gained 3.9% in the last year, Telos shareholders might be miffed that they lost 72%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. With the stock down 25% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand Telos better, we need to consider many other factors. Even so, be aware that Telos is showing 4 warning signs in our investment analysis , and 2 of those are potentially serious...
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
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.
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