Even after rising 13% last week, Forum Energy Technologies Inc (NYSE:FET) shareholders are still down 88% over the past five years

Over the past month, the Forum Energy Technologies, Inc. (NYSE:FET) was much stronger than before, rebounding 45%. But will it heal all the wounds inflicted in 5 years of decline? Unlikely. Five years have seen the stock price drop precipitously, down 88%. So we are not gaining too much confidence with the recent recovery. The company’s fundamental performance will ultimately determine whether the turnaround can be sustained. We really feel for the shareholders in this scenario. It’s a good reminder of the importance of diversification, and it’s worth bearing in mind that there’s more to life than money anyway.

On a more encouraging note, the company has added US$17 million to its market cap in the last 7 days alone, so let’s see if we can work out what caused the five-year loss for shareholders.

See our latest analysis for Forum Energy Technologies

Forum Energy Technologies is currently unprofitable, so most analysts would look to revenue growth to get a sense of how fast the underlying business is growing. Generally speaking, companies without profits should increase their revenue every year, and at a good pace. Some companies are willing to defer profitability to increase revenue faster, but in this case, good revenue growth is expected.

Over the past five years, Forum Energy Technologies has seen its turnover decline by 12% per year. This is certainly a lower result than most nonprofits report. It is therefore not entirely surprising to see the share price decline by 13% per year during the same period. We don’t think that’s a particularly promising picture. Ironically, this behavior could create an opportunity for the contrarian investor – but only if there are good reasons to predict a better future.

You can see how earnings and revenue have changed over time in the image below (click on the graph to see exact values).

NYSE: FET Earnings and Revenue Growth August 13, 2022

If you are considering buying or selling shares of Forum Energy Technologies, you should check out this FREE detailed report on its balance sheet.

A different perspective

We are pleased to report that Forum Energy Technologies shareholders received a 35% one-year total shareholder return. Notably, the five-year annualized TSR loss of 13% per year compares very unfavorably to recent share price performance. We generally value long-term performance more than short-term performance, but the recent improvement could point to a (positive) inflection point within the company. I find it very interesting to look at stock price over the long term as a proxy for company performance. But to really get insight, we also need to consider other information. Take risks, for example – Forum Energy Technologies a 1 warning sign we think you should know.

Sure, you might find a fantastic investment by looking elsewhere. So take a look at this free list of companies that we believe will increase their profits.

Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on US exchanges.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

Melvin B. Baillie