mdf commerce inc. (TSE:MDF) shareholders should be happy to see the share price up 19% in the last month. But over the last three years we've seen a quite serious decline. In that time, the share price dropped 66%. Some might say the recent bounce is to be expected after such a bad drop. Perhaps the company has turned over a new leaf.

So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.

See our latest analysis for mdf commerce

mdf commerce isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over three years, mdf commerce grew revenue at 20% per year. That's well above most other pre-profit companies. The share price has moved in quite the opposite direction, down 19% over that time, a bad result. It seems likely that the market is worried about the continual losses. But a share price drop of that magnitude could well signal that the market is overly negative on the stock.

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

If you are thinking of buying or selling mdf commerce stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's nice to see that mdf commerce shareholders have received a total shareholder return of 45% over the last year. Notably the five-year annualised TSR loss of 10% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand mdf commerce better, we need to consider many other factors. For example, we've discovered 2 warning signs for mdf commerce (1 is a bit unpleasant!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Canadian 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.