Even after rising 14% this past week, Flux Power Holdings (NASDAQ:FLUX) shareholders are still down 79% over the past five years

FLUX POWER HOLDINGS INC -2.55% Pre

FLUX POWER HOLDINGS INC

FLUX

4.58

4.58

-2.55%

0.00% Pre

Flux Power Holdings, Inc. (NASDAQ:FLUX) shareholders should be happy to see the share price up 14% in the last week. But spare a thought for the long term holders, who have held the stock as it bled value over the last five years. Indeed, the share price is down a whopping 79% in that time. So we don't gain too much confidence from the recent recovery. The important question is if the business itself justifies a higher share price in the long term.

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 Flux Power Holdings

Given that Flux Power Holdings 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over five years, Flux Power Holdings grew its revenue at 44% per year. That's well above most other pre-profit companies. So on the face of it we're really surprised to see the share price has averaged a fall of 12% each year, in the same time period. You'd have to assume the market is worried that profits won't come soon enough. While there might be an opportunity here, you'd want to take a close look at the balance sheet strength.

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

earnings-and-revenue-growth
NasdaqCM:FLUX Earnings and Revenue Growth December 29th 2023

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

A Different Perspective

Flux Power Holdings shareholders are down 1.5% for the year, but the market itself is up 27%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, longer term shareholders are suffering worse, given the loss of 12% doled out over the last five years. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. 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. To that end, you should be aware of the 2 warning signs we've spotted with Flux Power Holdings .

Of course Flux Power Holdings may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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

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