It’s nice to see the Questerre Energy Corporation (TSE:QEC) share price up 15% in a week. But if you look at the last five years the returns have not been good. You would have done a lot better buying an index fund, since the stock has dropped 23% in that half decade.
Although the past week has been more reassuring for shareholders, they’re still in the red over the last five years, so let’s see if the underlying business has been responsible for the decline.
Check out our latest analysis for Questerre Energy
Given that Questerre Energy 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 desire strong 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.
Over five years, Questerre Energy grew its revenue at 10% per year. That’s a fairly respectable growth rate. We doubt many shareholders are ok with the fact the share price has fallen 4% each year for half a decade. Those who bought back then clearly believed in stronger growth – and maybe even profits. The lesson is that if you buy shares in a money losing company you could end up losing money.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
Questerre Energy provided a TSR of 4.5% over the last twelve months. But that return falls short of the market. But at least that’s still a gain! Over five years the TSR has been a reduction of 4% per year, over five years. It could well be that the business is stabilizing. 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. For example, we’ve discovered 1 warning sign for Questerre Energy that you should be aware of before investing here.
But note: Questerre Energy 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 Canadian exchanges.
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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.
