If you love investing in stocks you're bound to buy some losers. Long term Mesa Laboratories, Inc. (NASDAQ:MLAB) shareholders know that all too well, since the share price is down considerably over three years. Sadly for them, the share price is down 61% in that time. And the ride hasn't got any smoother in recent times over the last year, with the price 41% lower in that time. The last week also saw the share price slip down another 12%.

With the stock having lost 12% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

We don't think that Mesa Laboratories' modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

Over three years, Mesa Laboratories grew revenue at 19% per year. That's a fairly respectable growth rate. So some shareholders would be frustrated with the compound loss of 17% per year. The market must have had really high expectations to be disappointed with this progress. So this is one stock that might be worth investigating further, or even adding to your watchlist.

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

We know that Mesa Laboratories has improved its bottom line lately, but what does the future have in store? You can see what analysts are predicting for Mesa Laboratories in this interactive graph of future profit estimates.

A Different Perspective

While the broader market gained around 31% in the last year, Mesa Laboratories shareholders lost 41% (even including dividends). 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 9% 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. 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. Case in point: We've spotted 2 warning signs for Mesa Laboratories you should be aware of, and 1 of them is a bit unpleasant.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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.