Taking the occasional loss comes part and parcel with investing on the stock market. Unfortunately, shareholders of Clarivate Plc (NYSE:CLVT) have suffered share price declines over the last year. The share price has slid 57% in that time. Even if you look out three years, the returns are still disappointing, with the share price down43% in that time. Shareholders have had an even rougher run lately, with the share price down 33% in the last 90 days.

If the past week is anything to go by, investor sentiment for Clarivate isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

Check out our latest analysis for Clarivate

Given that Clarivate 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Clarivate grew its revenue by 46% over the last year. That's definitely a respectable growth rate. Meanwhile, the share price tanked 57%, suggesting the market had much higher expectations. It is of course possible that the business will still deliver strong growth, it will just take longer than expected to do it. For us it's important to consider when you think a company will become profitable, if you're basing your valuation on revenue.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Take a more thorough look at Clarivate's financial health with this free report on its balance sheet.

A Different Perspective

The last twelve months weren't great for Clarivate shares, which performed worse than the market, costing holders 57%. Meanwhile, the broader market slid about 21%, likely weighing on the stock. The three-year loss of 13% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Clarivate , and understanding them should be part of your investment process.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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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.