January 20, 2022

Earn Money

Business Life

Those Who Purchased Skyfii (ASX:SKF) Shares Five Years Ago Have A 70% Loss To Show For It

Statistically speaking, long term investing is a profitable endeavour. But along the way some stocks are going to perform badly. To wit, the Skyfii Limited (ASX:SKF) share price managed to fall 70% over five long years. That’s not a lot of fun for true believers. And it’s not just long term holders hurting, because the stock is down 62% in the last year. More recently, the share price has dropped a further 68% in a month. But this could be related to poor market conditions — stocks are down 33% in the same time.

Check out our latest analysis for Skyfii

Given that Skyfii 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. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last half decade, Skyfii saw its revenue increase by 47% per year. That’s better than most loss-making companies. In contrast, the share price is has averaged a loss of 21% per year – that’s quite disappointing. It’s safe to say investor expectations are more grounded now. Given the revenue growth we’d consider the stock to be quite an interesting prospect if the company has a clear path to profitability.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

ASX:SKF Income Statement, March 23rd 2020

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

While the broader market lost about 20% in the twelve months, Skyfii shareholders did even worse, losing 62%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there’s a good opportunity. Unfortunately, last year’s performance may indicate unresolved challenges, given that it was worse than the annualised loss of 21% 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 Skyfii better, we need to consider many other factors. For example, we’ve discovered 3 warning signs for Skyfii that you should be aware of before investing here.

If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

Source Article