Yahoo Finance Amidst increasing losses, Investors bid up FINEOS Corporation Holdings (ASX:FCL) 20% this past week
FINEOS Corporation Holdings plc (ASX:FCL) shareholders should be happy to see the share price up 20% in the last week. But over the last three years we've seen a quite serious decline. Tragically, the share price declined 50% in that time. So the improvement may be a real relief to some. Perhaps the company has turned over a new leaf.
On a more encouraging note the company has added AU$72m to its market cap in just the last 7 days, so let's see if we can determine what's driven the three-year loss for shareholders.
Check out our latest analysis for FINEOS Corporation Holdings
Because FINEOS Corporation Holdings 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Over three years, FINEOS Corporation Holdings grew revenue at 17% per year. That's a pretty good rate of top-line growth. So some shareholders would be frustrated with the compound loss of 15% per year. The market must have had really high expectations to be disappointed with this progress. So this is one stock that might be worth investigating further, or even adding to your watchlist.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. You can see what analysts are predicting for FINEOS Corporation Holdings in this interactive graph of future profit estimates.
A Different Perspective
The last twelve months weren't great for FINEOS Corporation Holdings shares, which performed worse than the market, costing holders 46%. The market shed around 2.8%, no doubt weighing on the stock price. Shareholders have lost 15% 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 Baron Rothschild famously said to "buy when there's blood in the streets, even if the blood is your own", he also focusses on high quality stocks with solid prospects. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with FINEOS Corporation Holdings , and understanding them should be part of your investment process.
FINEOS Corporation Holdings is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Australian 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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