Introducing PFSweb (NASDAQ:PFSW), The Stock That Slid 60% In The Last Five Years

This month, we saw the PFSweb, Inc. (NASDAQ:PFSW) up an impressive 60%. But that is little comfort to those holding over the last half decade, sitting on a big loss. The share price has failed to impress anyone , down a sizable 60% during that time. So is the recent increase sufficient to restore confidence in the stock? Not yet. We'd err towards caution given the long term under-performance.

View our latest analysis for PFSweb

PFSweb isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last half decade, PFSweb saw its revenue increase by 1.4% per year. That's not a very high growth rate considering it doesn't make profits. It's likely this weak growth has contributed to an annualised return of 17% for the last five years. We'd want to see proof that future revenue growth is likely to be significantly stronger before getting too interested in PFSweb. However, it's possible too many in the market will ignore it, and there may be an opportunity if it starts to recover down the track.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. If you are thinking of buying or selling PFSweb stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

It's nice to see that PFSweb shareholders have received a total shareholder return of 48% over the last year. That certainly beats the loss of about 17% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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. Take risks, for example - PFSweb has 1 warning sign we think you should be aware of.

PFSweb is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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

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