It certainly might concern KLX Energy Services Holdings, Inc. (NASDAQ:KLXE) shareholders to see the share price down 54% in just 30 days. Looking on the brighter side, the stock is actually up over twelve months. But to be blunt its return of 32% fall short of what you could have got from an index fund (around 59%).
Because KLX Energy Services Holdings made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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.
KLX Energy Services Holdings actually shrunk its revenue over the last year, with a reduction of 49%. The lacklustre gain of 32% over twelve months, is not a bad result given the falling revenue. Generally we're pretty unenthusiastic about loss making stocks that are not growing revenue.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
Take a more thorough look at KLX Energy Services Holdings' financial health with this free report on its balance sheet.
A Different Perspective
We're happy to report that KLX Energy Services Holdings are up 32% over the year. While it's always nice to make a profit on the stock market, we do note that the TSR was no better than the broader market return of about 59%. The last three months haven't been great for shareholder returns, since the share price has trailed the market by 10% in the last three months. It might be that investors are more concerned about the business lately due to some fundamental change (or else the share price simply got ahead of itself, previously). 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 - KLX Energy Services Holdings has 5 warning signs (and 2 which don't sit too well with us) we think you should know about.
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.
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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