Investors in frequency electronics (NASDAQ:FEIM) have sadly lost 43% over the past year

It’s easy to match the overall market return by buying an index fund. While individual stocks can be big winners, many others fail to generate satisfactory returns. Investors in Frequency Electronics, Inc. (NASDAQ: FEIM) have tasted this bitter downside over the past year, with the stock price dropping 43%. This contrasts poorly with the market’s 18% decline. We can see that it hasn’t been easy either for shareholders over the past three years; the stock price fell 42% during this period. The falls have accelerated recently, with the stock price falling 19% in the past three months.

With that in mind, it’s worth looking at whether the company’s underlying fundamentals have been driving long-term performance, or if there are any gaps.

Check out our latest analysis for frequency electronics

Since Frequency Electronics has not made a profit in the past twelve months, we will focus on revenue growth to get a quick overview of its business development. Generally speaking, companies without profits should increase their revenue every year, and at a good pace. Indeed, it is difficult to be sure that a business will be sustainable if revenue growth is negligible and it never makes a profit.

In just one year, Frequency Electronics has seen its turnover drop by 11%. This is generally not what investors want to see. Shareholders saw the share price drop 43% during this period. What would you expect when revenue is down and he’s not making a profit? It’s hard to escape the conclusion that buyers need to consider either long-term growth or cost reduction, or both.

The graph below illustrates the evolution of income and income over time (reveal the exact values ​​by clicking on the image).

earnings-and-revenue-growth

It’s probably worth noting that the CEO is paid less than the median at companies of a similar size. But while it’s still worth checking out CEO compensation, the really important question is whether the company can increase its profits in the future. Before buying or selling a stock, we always recommend careful consideration of historical growth trends, available here..

A different perspective

We regret to report that Frequency Electronics shareholders are down 43% for the year. Unfortunately, this is worse than the general market decline of 18%. However, it could simply be that the stock price was impacted by greater market jitters. It might be worth keeping an eye on the fundamentals, in case there is a good opportunity. Unfortunately, last year’s performance may point to unresolved challenges, given that it was worse than the 4% annualized loss over the past half-decade. Generally speaking, long-term stock price weakness can be a bad sign, although contrarian investors may want to seek out the stock in hopes of a turnaround. While it’s worth considering the various impacts that market conditions can have on the stock price, there are other, even more important factors. Take risks, for example – Frequency Electronics has 1 warning sign we think you should know.

If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of companies that have proven that they can increase their profits.

Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on US exchanges.

Feedback on this article? Concerned about content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Robert D. Coleman