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It is doubtless a positive to see that the GreenFirst Forest Products Inc. (TSE:GFP) share price has gained some 60% in the last three months. Meanwhile over the last three years the stock has dropped hard. Regrettably, the share price slid 65% in that period. So the improvement may be a real relief to some. After all, could be that the fall was overdone.
Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns.
View our latest analysis for GreenFirst Forest Products
GreenFirst Forest Products 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 desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last three years, GreenFirst Forest Products saw its revenue grow by 38% per year, compound. That's well above most other pre-profit companies. In contrast, the share price is down 18% compound, over three years - disappointing by most standards. It seems likely that the market is worried about the continual losses. 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 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 GreenFirst Forest Products stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Investors in GreenFirst Forest Products had a tough year, with a total loss of 46%, against a market gain of about 28%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 27%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand GreenFirst Forest Products better, we need to consider many other factors. Even so, be aware that GreenFirst Forest Products is showing 4 warning signs in our investment analysis , and 2 of those shouldn't be ignored...