Investors in StarTek (NYSE:SRT) have made a return of 12% over the past year

StarTek, Inc. (NYSE:SRT) shareholders might be concerned after seeing the share price drop 19% in the last quarter. Looking on the brighter side, the stock is actually up over twelve months. But to be blunt its return of 12% fall short of what you could have got from an index fund (around 35%).

So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.

See our latest analysis for StarTek

StarTek 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. 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 year StarTek saw its revenue grow by 7.8%. That's not a very high growth rate considering it doesn't make profits. It's probably fair to say that the modest growth is reflected in the modest share price gain of 12%. It might be worth thinking about how long it will take the company to turn a profit.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

StarTek shareholders are up 12% for the year. Unfortunately this falls short of the market return of around 35%. On the bright side that gain is actually better than the average return of 2.3% over the last three years, implying that the company is doing better recently. If the business can justify the share price gain with improving fundamental data, then there could be more gains to come. It's always interesting to track share price performance over the longer term. But to understand StarTek better, we need to consider many other factors. Take risks, for example - StarTek has 1 warning sign we think you should be aware of.

StarTek is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.