Investors push Outfront Media (NYSE:OUT) to 6.2% decline this week, the company’s mounting losses could be to blame

Passive investing in index funds can generate returns that roughly match the broader market. But you can dramatically increase your returns by picking above-average stocks. For example, the Outfront Media Inc. (NYSE:OUT) The stock price has risen 33% over the past year, clearly outperforming the market return of around 4.2% (excluding dividends). That’s a solid performance by our standards! That said, longer-term returns aren’t that impressive, with stocks gaining just 16% in three years.

Although Outfront Media lost $230 million of its market capitalization this week, let’s take a look at its longer-term fundamental trends and see if they generated any returns.

Check out our latest analysis for Outfront Media

Given that Outfront Media has posted losses over the past twelve months, we think the market is likely more focused on revenue and revenue growth, at least for now. When a business is not making a profit, you generally expect to see good revenue growth. Indeed, rapid revenue growth can be easily extrapolated to predict profits, often of considerable size.

Last year, Outfront Media saw its revenue decline by 3.8%. The stock is up 33% over this period, a fine performance given the drop in revenue. To us, that means there’s not much correlation between past earnings performance and stock price, but a closer look at analyst forecasts and earnings may very well explain a lot.

The company’s revenues and profits (over time) are shown in the image below (click to see exact figures).

Take a closer look at Outfront Media’s financial health with this free report on its balance sheet.

A different perspective

It’s good to see that Outfront Media has rewarded shareholders with a total shareholder return of 35% over the past twelve months. Of course, this includes the dividend. That’s better than the 1.6% annualized return over half a decade, implying the company has been doing better recently. At best, this may hint at genuine trading momentum, implying that now could be a great time to dig deeper. It is always interesting to follow the evolution of the share price over the long term. But to better understand Outfront Media, we need to consider many other factors. Take risks, for example – Outfront Media has 3 warning signs (and 1 which is a little obnoxious) that we think you should know about.

If you like buying stocks alongside management then you might love this free list of companies. (Hint: insiders bought them).

Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on US exchanges.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.