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The truth is that if you invest for long enough, you're going to end up with some losing stocks. Long term Helix Energy Solutions Group, Inc. (NYSE:HLX) shareholders know that all too well, since the share price is down considerably over three years. Sadly for them, the share price is down 58% in that time. And more recent buyers are having a tough time too, with a drop of 42% in the last year. Shareholders have had an even rougher run lately, with the share price down 26% in the last 90 days. Of course, this share price action may well have been influenced by the 19% decline in the broader market, throughout the period.
If the past week is anything to go by, investor sentiment for Helix Energy Solutions Group isn't positive, so let's see if there's a mismatch between fundamentals and the share price.
Given that Helix Energy Solutions Group didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. 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.
Over the last three years, Helix Energy Solutions Group's revenue dropped 4.4% per year. That's not what investors generally want to see. The share price decline of 16% compound, over three years, is understandable given the company doesn't have profits to boast of, and revenue is moving in the wrong direction. Having said that, if growth is coming in the future, now may be the low ebb for the company. We don't generally like to own companies that lose money and can't grow revenues. But any company is worth looking at when it makes a maiden profit.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
Take a more thorough look at Helix Energy Solutions Group's financial health with this free report on its balance sheet.
A Different Perspective
While the broader market lost about 20% in the twelve months, Helix Energy Solutions Group shareholders did even worse, losing 42%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 6% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Helix Energy Solutions Group , and understanding them should be part of your investment process.
But note: Helix Energy Solutions Group may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.