If you build a properly diversified stock portfolio, it’s likely that some of your choices will perform poorly. But the last three years have been particularly difficult in the long term. Caesars Entertainment, Inc. (NASDAQ:CZR) shareholders. So they might be moved by the 65% share price collapse around that time. And the ride hasn’t gotten any smoother in recent times over the past year, with the price 29% lower during that time. What’s more, it’s down 21% in about a quarter. This isn’t much fun for the holders.
Given that shareholders are down over the long term, let’s look at the underlying fundamentals over this period and see if they have been consistent with returns.
Check out our latest analysis for Caesars Entertainment
Given that Caesars Entertainment reported a loss over the last twelve months, we think the market is probably more focused on revenue and revenue growth, at least for now. Shareholders of unprofitable companies generally want strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in this case one would hope for good top-line growth to make up for the lack of profits.
Over three years, Caesars Entertainment grew its revenue by 7.5% per year. This is not a very high growth rate given that it is not generating profits. It’s likely that this weak growth contributed to an annualized return of 18% over the past three years. When a stock falls like this, some investors like to add the company to a watch list (in case the company recovers, longer term). After all, growing a business isn’t easy and the process won’t always be smooth.
The chart below shows how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
We like the fact that insiders have been buying shares in the last twelve months. That said, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So we recommend you to check this free report showing consensus forecasts
Caesars Entertainment investors had a rough year, with a total loss of 29%, compared to a market gain of about 26%. Even good quality stock prices fall sometimes, but we want to see improvements in a company’s fundamentals before we get too interested. Unfortunately, last year’s performance may indicate unresolved challenges, given that it was worse than the 7% annualized loss over the past five years. We realize that Baron Rothschild said investors should “buy when there is blood on the streets”, but we caution that investors should first ensure they are buying a high quality business. If you want to further research this stock, the insider buying data is an obvious place to start. You can click here to see who bought shares – and the price they paid.