WEBULL

Investors in GrafTech International (NYSE:EAF) from three years ago are still down 82%, even after 28% gain this past week

Simply Wall St · 07/22 11:41

It is a pleasure to report that the GrafTech International Ltd. (NYSE:EAF) is up 127% in the last quarter. But the last three years have seen a terrible decline. Indeed, the share price is down a whopping 82% in the last three years. So it sure is nice to see a bit of an improvement. Of course the real question is whether the business can sustain a turnaround. We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.

Although the past week has been more reassuring for shareholders, they're still in the red over the last three years, so let's see if the underlying business has been responsible for the decline.

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GrafTech International 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

In the last three years GrafTech International saw its revenue shrink by 41% per year. That's definitely a weaker result than most pre-profit companies report. The swift share price decline at an annual compound rate of 22%, reflects this weak fundamental performance. We prefer leave it to clowns to try to catch falling knives, like this stock. There is a good reason that investors often describe buying a sharply falling stock price as 'trying to catch a falling knife'. Think about it.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
NYSE:EAF Earnings and Revenue Growth July 22nd 2025

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. So it makes a lot of sense to check out what analysts think GrafTech International will earn in the future (free profit forecasts).

A Different Perspective

It's good to see that GrafTech International has rewarded shareholders with a total shareholder return of 42% in the last twelve months. That certainly beats the loss of about 12% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand GrafTech International better, we need to consider many other factors. For example, we've discovered 3 warning signs for GrafTech International that you should be aware of before investing here.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

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