If You Had Bought Accuray (NASDAQ:ARAY) Stock Five Years Ago, You'd Be Sitting On A 59% Loss, Today
We think intelligent long term investing is the way to go. But no-one is immune from buying too high. To wit, the Accuray Incorporated (NASDAQ:ARAY) share price managed to fall 59% over five long years. That's an unpleasant experience for long term holders. And we doubt long term believers are the only worried holders, since the stock price has declined 23% over the last twelve months. There was little comfort for shareholders in the last week as the price declined a further 1.4%.
See our latest analysis for Accuray
Because Accuray 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over five years, Accuray grew its revenue at 1.8% per year. That's not a very high growth rate considering it doesn't make profits. It's likely this weak growth has contributed to an annualised return of 16% for the last five years. We'd want to see proof that future revenue growth is likely to be significantly stronger before getting too interested in Accuray. When a stock falls hard like this, some investors like to add the company to a watchlist (in case the business recovers, longer term).
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
If you are thinking of buying or selling Accuray stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Accuray shareholders are down 23% for the year, but the market itself is up 29%. 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 16% 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. If you would like to research Accuray in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
But note: Accuray 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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.
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. Thank you for reading.