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EMIRE Deutsche Mittelstand Real Estate AG (ETR:DMRE) shareholders have reason to be optimistic after a 15% surge in the past week, but this doesn't erase the fact that the company's long-term performance has been dismal. Over the last five years, the share price has plummeted by 85%, leaving long-term investors with significant losses.

    While the recent bounce may signal an end to the decline, we remain cautious. The key question is whether the business fundamentals justify a higher share price in the long term. For those who have held through the price crash, it's essential to have a diversified portfolio.

    Let's examine the company's revenue growth, as it made a loss in the last twelve months. Typically, investors focus on revenue and growth when a company isn't profitable. DEMIRE Deutsche Mittelstand Real Estate's revenue has actually shrunk by 2.7% annually over the past five years, which is not what investors want to see.

    The share price decline of 13% per year over this period serves as a reminder that money-losing companies are expected to grow their top line. We're generally wary of companies with declining revenues, and fear of becoming a 'bagholder' may be deterring some investors from this stock.

    Looking at the company's balance sheet strength is crucial, and we've created a free report on how its financial position has changed over time. DEMIRE Deutsche Mittelstand Real Estate's total shareholder return (TSR) was a 79% drop over the last five years, which wasn't as bad as the share price return due to its history of dividend payouts.