Investors can approximate the average market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Unfortunately the Kalray S.A. (EPA:ALKAL) share price slid 18% over twelve months. That's disappointing when you consider the market returned 7.7%. Kalray may have better days ahead, of course; we've only looked at a one year period. It's down 4.1% in the last seven days.
Given that Kalray didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. 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.
Kalray grew its revenue by 23% over the last year. That's definitely a respectable growth rate. Meanwhile, the share price is down 18% over twelve months, which is disappointing given the progress made. This implies the market was expecting better growth. However, that's in the past now, and it's the future that matters most.
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 Kalray's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
While Kalray shareholders are down 18% for the year, the market itself is up 7.7%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 4.7% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
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 FR exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.