This week we saw the NFON AG (ETR:NFN) share price climb by 15%. But that is small recompense for the exasperating returns over three years. Indeed, the share price is down a tragic 60% in the last three years. So the improvement may be a real relief to some. After all, could be that the fall was overdone.
On a more encouraging note the company has added €13m to its market cap in just the last 7 days, so let's see if we can determine what's driven the three-year loss for shareholders. NB04
Check out our latest analysis for NFON
NFON isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect 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.
In the last three years, NFON saw its revenue grow by 8.4% per year, compound. 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. To be frank we're surprised to see revenue growth and share price growth diverge so strongly. It would be well worth taking a closer look at the company, to determine growth trends (and balance sheet strength).
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Take a more thorough look at NFON's financial health with this free report on its balance sheet.
NFON's TSR for the year was broadly in line with the market average, at 13%. To take a positive view, the gain is pleasing, and it sure beats annualized TSR loss of 9%, which was endured over half a decade. While 'turnarounds seldom turn' there are green shoots for NFON. You could get a better understanding of NFON's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
We will like NFON better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on German exchanges.
Find out whether NFON is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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NFON AG provides cloud-based telecommunication services to business customers in Germany, Austria, Italy, the United Kingdom, Spain, Italy, France, and other countries.
Excellent balance sheet with reasonable growth potential.
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