In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. But the risk of stock picking is that you will likely buy under-performing companies. Unfortunately, that's been the case for longer term Trainline Plc (LON:TRN) shareholders, since the share price is down 23% in the last three years, falling well short of the market decline of around 1.5%. More recently, the share price has dropped a further 8.7% in a month. But this could be related to poor market conditions -- stocks are down 5.6% in the same time.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

See our latest analysis for Trainline

Because Trainline 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. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Over the last three years, Trainline's revenue dropped 24% per year. That's definitely a weaker result than most pre-profit companies report. With revenue in decline, the share price decline of 7% per year is hardly undeserved. The key question now is whether the company has the capacity to fund itself to profitability, without more cash. The company will need to return to revenue growth as quickly as possible, if it wants to see some enthusiasm from investors.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Trainline is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So it makes a lot of sense to check out what analysts think Trainline will earn in the future (free analyst consensus estimates)

A Different Perspective

Trainline shareholders are down 12% over twelve months, which isn't far from the market return of -11%. Stock has cost shareholders 7% per year for three years. The fact that the most recent year is worse, suggests ongoing challenges. Some people who buy stocks with declining share prices get called 'bagholders', which is slang for a person who owns worthless shares. Investors need thick skin. It's always interesting to track share price performance over the longer term. But to understand Trainline better, we need to consider many other factors. For instance, we've identified 1 warning sign for Trainline that you should be aware of.