ECSC Group plc (LON:ECSC) shareholders should be happy to see the share price up 13% in the last quarter. But that is minimal compensation for the share price under-performance over the last year. In fact, the price has declined 20% in a year, falling short of the returns you could get by investing in an index fund.
Check out our latest analysis for ECSC Group
Because ECSC Group is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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 twelve months, ECSC Group increased its revenue by 12%. That's not a very high growth rate considering it doesn't make profits. Given this fairly low revenue growth (and lack of profits), it's not particularly surprising to see the stock down 20% in a year. It's important not to lose sight of the fact that profitless companies must grow. So remember, if you buy a profitless company then you risk being a profitless investor.
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 ECSC Group stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
While ECSC Group shareholders are down 20% for the year, the market itself is up 4.1%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Putting aside the last twelve months, it's good to see the share price has rebounded by 13%, in the last ninety days. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). Before spending more time on ECSC Group it might be wise to click here to see if insiders have been buying or selling shares.
Of course ECSC Group may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB exchanges.
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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.