If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. Long term Viasat, Inc. (NASDAQ:VSAT) shareholders know that all too well, since the share price is down considerably over three years. Regrettably, they have had to cope with a 54% drop in the share price over that period. Unfortunately the share price momentum is still quite negative, with prices down 13% in thirty days. But this could be related to poor market conditions -- stocks are down 5.4% in the same time.
Since Viasat has shed US$360m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.
See our latest analysis for Viasat
Given that Viasat only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.
Over three years, Viasat grew revenue at 7.3% per year. Given it's losing money in pursuit of growth, we are not really impressed with that. This uninspiring revenue growth has no doubt helped send the share price lower; it dropped 15% during the period. It can be well worth keeping an eye on growth stocks that disappoint the market, because sometimes they re-accelerate. Keep in mind it isn't unusual for good businesses to have a tough time or a couple of uninspiring years.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
It is of course excellent to see how Viasat has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling Viasat stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
We regret to report that Viasat shareholders are down 13% for the year. Unfortunately, that's worse than the broader market decline of 4.6%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. 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. It's always interesting to track share price performance over the longer term. But to understand Viasat better, we need to consider many other factors. For example, we've discovered 4 warning signs for Viasat (1 makes us a bit uncomfortable!) that you should be aware of before investing here.