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It hasn't been the best quarter for FRIWO AG (ETR:CEA) shareholders, since the share price has fallen 23% in that time. On the bright side the returns have been quite good over the last half decade. It has returned a market beating 79% in that time. While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 45% drop, in the last year.
Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.
Check out our latest analysis for FRIWO
FRIWO isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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 5 years FRIWO saw its revenue grow at 8.0% per year. That's a pretty good long term growth rate. While the share price has beat the market, compounding at 12% yearly, over five years, there's certainly some potential that the market hasn't fully considered the growth track record. If revenue growth can maintain for long enough, it's likely profits will flow. There's no doubt that it can be difficult to value pre-profit companies.
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 FRIWO stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Investors in FRIWO had a tough year, with a total loss of 45%, against a market gain of about 16%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 12%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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. Even so, be aware that FRIWO is showing 1 warning sign in our investment analysis , you should know about...
Of course FRIWO may not be the best stock to buy. So you may wish to see this free collection of growth stocks.