Yahoo Finance Atomo Diagnostics (ASX:AT1 shareholders incur further losses as stock declines 15% this week, taking one-year losses to 47%
It's easy to match the overall market return by buying an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. Unfortunately the Atomo Diagnostics Limited (ASX:AT1) share price slid 47% over twelve months. That contrasts poorly with the market return of 16%. Because Atomo Diagnostics hasn't been listed for many years, the market is still learning about how the business performs. Furthermore, it's down 37% in about a quarter. That's not much fun for holders.
After losing 15% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.
View our latest analysis for Atomo Diagnostics
Atomo Diagnostics isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Atomo Diagnostics grew its revenue by 25% over the last year. That's definitely a respectable growth rate. Meanwhile, the share price is down 47% over twelve months, which is disappointing given the progress made. This implies the market was expecting better growth. However, that's in the past now, and it's the future that matters most.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
Given that the market gained 16% in the last year, Atomo Diagnostics shareholders might be miffed that they lost 47%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. The share price decline has continued throughout the most recent three months, down 37%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. It's always interesting to track share price performance over the longer term. But to understand Atomo Diagnostics better, we need to consider many other factors. For instance, we've identified 3 warning signs for Atomo Diagnostics that you should be aware of.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU 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.
