The simplest way to benefit from a rising market is to buy an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Investors in Pioneer Bancorp, Inc. (NASDAQ:PBFS) have tasted that bitter downside in the last year, as the share price dropped 38%. That’s well below the market return of 19%. We wouldn’t rush to judgement on Pioneer Bancorp because we don’t have a long term history to look at.
Check out our latest analysis for Pioneer Bancorp
Given that Pioneer Bancorp 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Pioneer Bancorp’s revenue didn’t grow at all in the last year. In fact, it fell 23%. That’s not what investors generally want to see. Shareholders have seen the share price drop 38% in that time. What would you expect when revenue is falling, and it doesn’t make a profit? It’s hard to escape the conclusion that buyers must envision either growth down the track, cost cutting, or both.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
earnings-and-revenue-growth
Take a more thorough look at Pioneer Bancorp’s financial health with this free report on its balance sheet.
A Different Perspective
Given that the market gained 19% in the last year, Pioneer Bancorp shareholders might be miffed that they lost 38%. While the aim is to do better than that, it’s worth recalling that even great long-term investments sometimes underperform for a year or more. The share price decline seems to have halted in the most recent three months, with the relatively flat share price 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. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example – Pioneer Bancorp has 1 warning sign we think you should be aware of.
But note: Pioneer Bancorp may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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