The truth is that if you invest for long enough, you're going to end up with some losing stocks. But long term Envestnet, Inc. (NYSE:ENV) shareholders have had a particularly rough ride in the last three year. Unfortunately, they have held through a 54% decline in the share price in that time. The more recent news is of little comfort, with the share price down 27% in a year. The falls have accelerated recently, with the share price down 42% in the last three months.

Since Envestnet has shed US$127m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

View our latest analysis for Envestnet

Envestnet 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. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last three years, Envestnet saw its revenue grow by 9.4% per year, compound. That's a fairly respectable growth rate. So some shareholders would be frustrated with the compound loss of 16% per year. The market must have had really high expectations to be disappointed with this progress. It would be well worth taking a closer look at the company, to determine growth trends (and balance sheet strength).

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

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. If you are thinking of buying or selling Envestnet stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

While the broader market gained around 6.1% in the last year, Envestnet shareholders lost 27%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 5% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.

Envestnet is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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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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.