Over the last month the Century Casinos, Inc. (NASDAQ:CNTY) has been much stronger than before, rebounding by 30%. But that doesn't change the fact that the returns over the last three years have been stomach churning. To wit, the share price sky-dived 79% in that time. So it sure is nice to see a bit of an improvement. The thing to think about is whether the business has really turned around.

On a more encouraging note the company has added US$15m to its market cap in just the last 7 days, so let's see if we can determine what's driven the three-year loss for shareholders.

View our latest analysis for Century Casinos

Century Casinos wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. 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.

In the last three years, Century Casinos saw its revenue grow by 17% per year, compound. That's a pretty good rate of top-line growth. So it's hard to believe the share price decline of 21% per year is due to the revenue. It could be that the losses were much larger than expected. If you buy into companies that lose money then you always risk losing money yourself. Just don't lose the lesson.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

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

A Different Perspective

Investors in Century Casinos had a tough year, with a total loss of 23%, against a market gain of about 39%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 9% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Century Casinos better, we need to consider many other factors. For example, we've discovered 1 warning sign for Century Casinos that you should be aware of before investing here.

But note: Century Casinos 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 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.