Ark Restaurants Corp. (NASDAQ:ARKR) shareholders will doubtless be very grateful to see the share price up 41% in the last week. But that doesn't change the fact that the returns over the last five years have been less than pleasing. After all, the share price is down 28% in that time, significantly under-performing the market.
The recent uptick of 41% could be a positive sign of things to come, so let's take a look at historical fundamentals.
View our latest analysis for Ark Restaurants
Given that Ark Restaurants 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. Shareholders of unprofitable companies usually desire strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.
In the last half decade, Ark Restaurants saw its revenue increase by 9.1% per year. That's a fairly respectable growth rate. Shareholders have seen the share price fall at 5% per year, for five years: a poor performance. Those who bought back then clearly believed in stronger growth - and maybe even profits. There is always a big risk of losing money yourself when you buy shares in a company that loses money.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free interactive report on Ark Restaurants' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
We've already covered Ark Restaurants' share price action, but we should also mention its total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Ark Restaurants' TSR of was a loss of 22% for the 5 years. That wasn't as bad as its share price return, because it has paid dividends.
Ark Restaurants shareholders are up 13% for the year. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 4% endured over half a decade. So this might be a sign the business has turned its fortunes around. It's always interesting to track share price performance over the longer term. But to understand Ark Restaurants better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Ark Restaurants (including 1 which can't be ignored) .
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: most of them are flying under the radar).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
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