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What Type Of Returns Would Pixelworks'(NASDAQ:PXLW) Shareholders Have Earned If They Purchased Their SharesThree Years Ago?

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Simply Wall St
·3 min read
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This week we saw the Pixelworks, Inc. (NASDAQ:PXLW) share price climb by 23%. But that is small recompense for the exasperating returns over three years. Regrettably, the share price slid 56% in that period. So it's good to see it climbing back up. The rise has some hopeful, but turnarounds are often precarious.

Check out our latest analysis for Pixelworks

Given that Pixelworks 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. When a company doesn't make profits, we'd generally expect to see good 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 three years Pixelworks saw its revenue shrink by 11% per year. That's not what investors generally want to see. With revenue in decline, and profit but a dream, we can understand why the share price has been declining at 16% per year. Having said that, if growth is coming in the future, now may be the low ebb for the company. We'd be pretty wary of this one until it makes a profit, because we don't specialize in finding turnaround situations.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

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

If you are thinking of buying or selling Pixelworks stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While the broader market gained around 21% in the last year, Pixelworks shareholders lost 26%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 1.0% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Pixelworks better, we need to consider many other factors. For instance, we've identified 6 warning signs for Pixelworks (2 are a bit concerning) that you should be aware of.

But note: Pixelworks 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 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.