While not a mind-blowing move, it is good to see that the GTY Technology Holdings Inc. (NASDAQ:GTYH) share price has gained 30% in the last three months. But over the last three years we’ve seen a quite serious decline. Indeed, the share price is down a tragic 60% in the last three years. Some might say the recent bounce is to be expected after such a bad drop. After all, could be that the fall was overdone.
GTY Technology Holdings 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. When a company doesn’t make profits, we’d generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
GTY Technology Holdings shareholders are down 34% for the year, but the broader market is up 19%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The three-year loss of 17% per year isn’t as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. 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. For instance, we’ve identified 3 warning signs for GTY Technology Holdings (2 make us uncomfortable) that you should be aware of.
Of course GTY Technology 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 US exchanges.
This article by Simply Wall St is general in nature. 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.