Generally speaking long term investing is the way to go. But unfortunately, some companies simply don't succeed. For example the Bed Bath & Beyond Inc. (NASDAQ:BBBY) share price dropped 64% over five years. That's an unpleasant experience for long term holders. We also note that the stock has performed poorly over the last year, with the share price down 46%. Even worse, it's down 40% in about a month, which isn't fun at all. Importantly, this could be a market reaction to the recently released financial results. You can check out the latest numbers in our company report.
With the stock having lost 22% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.
View our latest analysis for Bed Bath & Beyond
Because Bed Bath & Beyond 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 half a decade Bed Bath & Beyond reduced its trailing twelve month revenue by 8.0% for each year. That's not what investors generally want to see. The share price decline of 10% compound, over five years, is understandable given the company is losing money, and revenue is moving in the wrong direction. The chance of imminent investor enthusiasm for this stock seems slimmer than Louise Brooks. Ultimately, it may be worth watching - should revenue pick up, the share price might follow.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. This free report showing analyst forecasts should help you form a view on Bed Bath & Beyond
What about the Total Shareholder Return (TSR)?
We'd be remiss not to mention the difference between Bed Bath & Beyond's total shareholder return (TSR) and its share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Bed Bath & Beyond's TSR of was a loss of 59% for the 5 years. That wasn't as bad as its share price return, because it has paid dividends.