The nature of investing is that you win some, and you lose some. Unfortunately, shareholders of HomeToGo SE (FRA:HTG) have suffered share price declines over the last year. The share price is down a hefty 62% in that time. We wouldn't rush to judgement on HomeToGo because we don't have a long term history to look at. On top of that, the share price is down 5.9% in the last week. However, this move may have been influenced by the broader market, which fell 2.9% in that time.
So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.
See our latest analysis for HomeToGo
HomeToGo 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
HomeToGo grew its revenue by 79% over the last year. That's a strong result which is better than most other loss making companies. In contrast the share price is down 62% over twelve months. Yes, the market can be a fickle mistress. This could mean hype has come out of the stock because the bottom line is concerning investors. We'd definitely consider it a positive if the company is trending towards profitability. If you can see that happening, then perhaps consider adding this stock to your watchlist.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
HomeToGo shareholders are down 62% for the year, even worse than the market loss of 16%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. The share price decline has continued throughout the most recent three months, down 5.1%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. It's always interesting to track share price performance over the longer term. But to understand HomeToGo better, we need to consider many other factors. Even so, be aware that HomeToGo is showing 3 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...