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The GRC International Group (LON:GRC) Share Price Is Down 85% So Some Shareholders Are Rather Upset

Even the best investor on earth makes unsuccessful investments. But it's not unreasonable to try to avoid truly shocking capital losses. We wouldn't blame GRC International Group plc (LON:GRC) shareholders if they were still in shock after the stock dropped like a lead balloon, down 85% in just one year. That'd be enough to make even the strongest stomachs churn. We wouldn't rush to judgement on GRC International Group because we don't have a long term history to look at. Even worse, it's down 47% in about a month, which isn't fun at all. However, we note the price may have been impacted by the broader market, which is down 23% in the same time period.

We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.

View our latest analysis for GRC International Group

GRC International Group 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. 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 just one year GRC International Group saw its revenue fall by 25%. That looks pretty grim, at a glance. The share price fall of 85% in a year tells the story. That's a stern reminder that profitless companies need to grow the top line, at the very least. But markets do over-react, so there opportunity for investors who are willing to take the time to dig deeper and understand the business.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

AIM:GRC Income Statement March 28th 2020
AIM:GRC Income Statement March 28th 2020

This free interactive report on GRC International Group's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

We doubt GRC International Group shareholders are happy with the loss of 85% over twelve months. That falls short of the market, which lost 19%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 6.1% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 6 warning signs for GRC International Group (of which 2 shouldn't be ignored!) you should know about.

Of course GRC International Group 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 GB exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.