GRC International Group plc (LON:GRC) shareholders should be happy to see the share price up 22% in the last quarter. But over the last three years we've seen a quite serious decline. Tragically, the share price declined 64% in that time. So the improvement may be a real relief to some. Perhaps the company has turned over a new leaf.
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.
Because GRC International 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last three years GRC International Group saw its revenue shrink by 14% per year. That's not what investors generally want to see. With revenue in decline, and profit but a dream, we can understand why the share price has been declining at 18% per year. Of course, it's the future that will determine whether today's price is a good one. 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).
This free interactive report on GRC International Group's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
We're pleased to report that GRC International Group rewarded shareholders with a total shareholder return of 42% over the last year. That certainly beats the loss of about 18% per year over three years. The optimist would say this is evidence that the stock has bottomed, and better days lie ahead. It's always interesting to track share price performance over the longer term. But to understand GRC International Group better, we need to consider many other factors. For example, we've discovered 4 warning signs for GRC International Group (1 is potentially serious!) that you should be aware of before investing here.
Of course GRC International 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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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.