It is doubtless a positive to see that the Sequans Communications S.A. (NYSE:SQNS) share price has gained some 68% in the last three months. But that is small recompense for the exasperating returns over three years. Tragically, the share price declined 53% in that time. So it’s good to see it climbing back up. After all, could be that the fall was overdone.
Because Sequans Communications 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last three years Sequans Communications saw its revenue shrink by 13% per year. That’s not what investors generally want to see. The share price decline of 22% compound, over three years, is understandable given the company doesn’t have profits to boast of, and revenue is moving in the wrong direction. Having said that, if growth is coming in the future, now may be the low ebb for the company. We don’t generally like to own companies that lose money and can’t grow revenues. But any company is worth looking at when it makes a maiden profit.
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
Sequans Communications shareholders are up 21% for the year. Unfortunately this falls short of the market return. But at least that’s still a gain! Over five years the TSR has been a reduction of 7.1% per year, over five years. It could well be that the business is stabilizing. It’s always interesting to track share price performance over the longer term. But to understand Sequans Communications better, we need to consider many other factors. Case in point: We’ve spotted 4 warning signs for Sequans Communications you should be aware of, and 1 of them is significant.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.