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While not a mind-blowing move, it is good to see that the Latham Group, Inc. (NASDAQ:SWIM) share price has gained 12% in the last three months. But that's small comfort given the dismal price performance over the last year. Specifically, the stock price slipped by 66% in that time. So the bounce should be viewed in that context. You could argue that the sell-off was too severe.
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 Latham Group
Because Latham Group 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. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In just one year Latham Group saw its revenue fall by 4.6%. That looks pretty grim, at a glance. The share price drop of 66% is understandable given the company doesn't have profits to boast of. Having said that, if growth is coming in the future, the stock may have better days ahead. We have a natural aversion to companies that are losing money and shrinking revenue. But perhaps that is being too careful.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. You can see what analysts are predicting for Latham Group in this interactive graph of future profit estimates.
A Different Perspective
While Latham Group shareholders are down 66% for the year, the market itself is up 6.9%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. It's great to see a nice little 12% rebound in the last three months. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. 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. Even so, be aware that Latham Group is showing 1 warning sign in our investment analysis , you should know about...