Long term investing is the way to go, but that doesn't mean you should hold every stock forever. We don't wish catastrophic capital loss on anyone. For example, we sympathize with anyone who was caught holding Intralot S.A. Integrated Lottery Systems and Services (ATH:INLOT) during the five years that saw its share price drop a whopping 93%. And some of the more recent buyers are probably worried, too, with the stock falling 61% in the last year. Furthermore, it's down 64% in about a quarter. That's not much fun for holders. However, one could argue that the price has been influenced by the general market, which is down 28% in the same timeframe.

We really feel for shareholders in this scenario. It's a good reminder of the importance of diversification, and it's worth keeping in mind there's more to life than money, anyway.

View our latest analysis for Intralot Integrated Lottery Systems and Services

Given that Intralot Integrated Lottery Systems and Services 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over half a decade Intralot Integrated Lottery Systems and Services reduced its trailing twelve month revenue by 18% for each year. That puts it in an unattractive cohort, to put it mildly. So it's not that strange that the share price dropped 41% per year in that period. This kind of price performance makes us very wary, especially when combined with falling revenue. Of course, the poor performance could mean the market has been too severe selling down. That can happen.

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 Intralot Integrated Lottery Systems and Services stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While the broader market lost about 9.4% in the twelve months, Intralot Integrated Lottery Systems and Services shareholders did even worse, losing 61%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 41% over the last half decade. 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. 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 3 warning signs with Intralot Integrated Lottery Systems and Services (at least 1 which is potentially serious) , and understanding them should be part of your investment process.

But note: Intralot Integrated Lottery Systems and Services may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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

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This article by Simply Wall St is general in nature. 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. Thank you for reading.