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Xtract One Technologies Inc. (TSE:XTRA) shareholders should be happy to see the share price up 19% in the last month. But that doesn't change the fact that the returns over the last half decade have been disappointing. In that time the share price has delivered a rude shock to holders, who find themselves down 62% after a long stretch. So we're hesitant to put much weight behind the short term increase. Of course, this could be the start of a turnaround.
While the last five years has been tough for Xtract One Technologies shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.
Check out our latest analysis for Xtract One Technologies
Xtract One Technologies isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally hope to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last half decade, Xtract One Technologies saw its revenue increase by 56% per year. That's well above most other pre-profit companies. Unfortunately for shareholders the share price has dropped 10% per year - disappointing considering the growth. It's safe to say investor expectations are more grounded now. If you think the company can keep up its revenue growth, you'd have to consider the possibility that there's an opportunity here.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
Investors in Xtract One Technologies had a tough year, with a total loss of 22%, against a market gain of about 21%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 10% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand Xtract One Technologies better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Xtract One Technologies (of which 1 is a bit concerning!) you should know about.