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What Type Of Returns Would Trainline's(LON:TRN) Shareholders Have Earned If They Purchased Their SharesYear Ago?

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Simply Wall St
·3 min read
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While not a mind-blowing move, it is good to see that the Trainline Plc (LON:TRN) share price has gained 20% in the last three months. But that doesn't change the reality of under-performance over the last twelve months. After all, the share price is down 11% in the last year, significantly under-performing the market.

See our latest analysis for Trainline

Trainline 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In just one year Trainline saw its revenue fall by 32%. That's not what investors generally want to see. Shareholders have seen the share price drop 11% in that time. That seems pretty reasonable given the lack of both profits and revenue growth. We think most holders must believe revenue growth will improve, or else costs will decline.

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

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

We doubt Trainline shareholders are happy with the loss of 11% over twelve months. That falls short of the market, which lost 6.8%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. It's great to see a nice little 20% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). 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. For instance, we've identified 3 warning signs for Trainline (1 can't be ignored) that you should be aware of.

We will like Trainline better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB 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 (at) simplywallst.com.