Even the best investor on earth makes unsuccessful investments. But it’s not unreasonable to try to avoid truly shocking capital losses. So we hope that those who held Nuverra Environmental Solutions, Inc. (NYSEMKT:NES) during the last year don’t lose the lesson, in addition to the 81% hit to the value of their shares. While some investors are willing to stomach this sort of loss, they are usually professionals who spread their bets thinly. Nuverra Environmental Solutions hasn’t been listed for long, so although we’re wary of recent listings that perform poorly, it may still prove itself with time. Furthermore, it’s down 47% in about a quarter. That’s not much fun for holders.
While a drop like that is definitely a body blow, money isn’t as important as health and happiness.
See our latest analysis for Nuverra Environmental Solutions
Given that Nuverra Environmental Solutions didn’t make a profit in the last twelve months, we’ll focus on revenue growth to form a quick view of its business development. When a company doesn’t make profits, we’d generally expect to see good revenue growth. 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.
Nuverra Environmental Solutions’s revenue didn’t grow at all in the last year. In fact, it fell 15%. That’s not what investors generally want to see. The market obviously agrees, since the share price tanked 81%. Holders should not lose the lesson: loss making companies should grow revenue. But markets do over-react, so there opportunity for investors who are willing to take the time to dig deeper and understand the business.
The company’s revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
AMEX:NES Income Statement May 5th 2020
Take a more thorough look at Nuverra Environmental Solutions’s financial health with this free report on its balance sheet.
A Different Perspective
Nuverra Environmental Solutions shareholders are down 81% for the year, even worse than the market loss of 1.7%. That’s disappointing, but it’s worth keeping in mind that the market-wide selling wouldn’t have helped. The share price decline has continued throughout the most recent three months, down 47%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we’d remain pretty wary until we see some strong business performance. 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. Take risks, for example – Nuverra Environmental Solutions has 3 warning signs we think you should be aware of.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
If you spot an error that warrants correction, please contact the editor at [email protected]. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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