Investors push SSH Communications Security Oyj (HEL:SSH1V) 11% lower this week, company's increasing losses might be to blame

Some SSH Communications Security Oyj (HEL:SSH1V) shareholders are probably rather concerned to see the share price fall 42% over the last three months. On the other hand, over the last twelve months the stock has delivered rather impressive returns. We're very pleased to report the share price shot up 163% in that time. So some might not be surprised to see the price retrace some. The real question is whether the business is trending in the right direction.

While this past week has detracted from the company's one-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.

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SSH Communications Security Oyj 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 hope 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 the last year SSH Communications Security Oyj saw its revenue grow by 10%. That's not a very high growth rate considering it doesn't make profits. In contrast, the share price took off during the year, gaining 163%. We're happy that investors have made money, though we wonder if the increase will be sustained. We're not so sure that revenue growth is driving the market optimism about the stock.

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

Take a more thorough look at SSH Communications Security Oyj's financial health with this free report on its balance sheet.

A Different Perspective

We're pleased to report that SSH Communications Security Oyj shareholders have received a total shareholder return of 163% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 10% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. For example, we've discovered 2 warning signs for SSH Communications Security Oyj that you should be aware of before investing here.

Of course SSH Communications Security Oyj 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 Finnish exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.