WISeKey International Holding AG (VTX:WIHN) shareholders should be happy to see the share price up 16% in the last month. But that is small recompense for the exasperating returns over three years. Indeed, the share price is down a tragic 58% in the last three years. So it is really good to see an improvement. The rise has some hopeful, but turnarounds are often precarious.
WISeKey International Holding isn't a profitable company, so 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. When a company doesn't make profits, we'd generally expect to see good 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.
In the last three years, WISeKey International Holding saw its revenue grow by 38% per year, compound. That's well above most other pre-profit companies. The share price has moved in quite the opposite direction, down 25% over that time, a bad result. This could mean hype has come out of the stock because the losses are concerning investors. When we see revenue growth, paired with a falling share price, we can't help wonder if there is an opportunity for those who are willing to dig deeper.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
This free interactive report on WISeKey International Holding's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Over the last year, WISeKey International Holding shareholders took a loss of 29%. In contrast the market gained about 12%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Shareholders have lost 25% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. Although Warren Buffett famously said he likes to 'buy when there is blood on the streets', he also focusses on high quality stocks with solid prospects. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CH exchanges.
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