These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But if you pick the right individual stocks, you could make more than that. For example, the HelloFresh SE (ETR:HFG) share price is up 81% in the last 1 year, clearly besting the market return of around 24% (not including dividends). If it can keep that out-performance up over the long term, investors will do very well! Unfortunately the longer term returns are not so good, with the stock falling 66% in the last three years.
Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.
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Given that HelloFresh didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
HelloFresh actually shrunk its revenue over the last year, with a reduction of 1.8%. Despite the lack of revenue growth, the stock has returned a solid 81% the last twelve months. To us that means that there isn't a lot of correlation between the past revenue performance and the share price, but a closer look at analyst forecasts and the bottom line may well explain a lot.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
HelloFresh is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for HelloFresh in this interactive graph of future profit estimates.
We're pleased to report that HelloFresh shareholders have received a total shareholder return of 81% over one year. That certainly beats the loss of about 12% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.
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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on German exchanges.