The last three months have been tough on Skillsoft Corp. (NYSE:SKIL) shareholders, who have seen the share price decline a rather worrying 30%. But that doesn't change the fact that the returns over the last year have been very strong. Like an eagle, the share price soared 157% in that time. So some might not be surprised to see the price retrace some. The real question is whether the business is trending in the right direction.

Since the stock has added US$23m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

We've discovered 3 warning signs about Skillsoft. View them for free.

Skillsoft wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last year Skillsoft saw its revenue shrink by 4.0%. So we would not have expected the share price to rise 157%. It just goes to show the market doesn't always pay attention to the reported numbers. It's quite likely the revenue fall was already priced in, anyway.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

This free interactive report on Skillsoft's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that Skillsoft shareholders have received a total shareholder return of 157% over the last year. Notably the five-year annualised TSR loss of 14% per year compares very unfavourably with the recent share price performance. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Skillsoft better, we need to consider many other factors.

We will like Skillsoft better if we see some big insider buys.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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.