Yahoo Finance Evotec (ETR:EVT shareholders incur further losses as stock declines 3.7% this week, taking three-year losses to 59%
Investing in stocks inevitably means buying into some companies that perform poorly. But the long term shareholders of Evotec SE (ETR:EVT) have had an unfortunate run in the last three years. So they might be feeling emotional about the 59% share price collapse, in that time. And the ride hasn't got any smoother in recent times over the last year, with the price 29% lower in that time. Furthermore, it's down 39% in about a quarter. That's not much fun for holders.
With the stock having lost 3.7% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.
See our latest analysis for Evotec
Because Evotec 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. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Over three years, Evotec grew revenue at 19% per year. That's a pretty good rate of top-line growth. That contrasts with the weak share price, which has fallen 17% compounded, over three years. The market must have had really high expectations to be disappointed with this progress. It would be well worth taking a closer look at the company, to determine growth trends (and balance sheet strength).
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. If you are thinking of buying or selling Evotec stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
Investors in Evotec had a tough year, with a total loss of 29%, against a market gain of about 10%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 7% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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. For instance, we've identified 1 warning sign for Evotec that you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on German exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
