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The nature of investing is that you win some, and you lose some. And there's no doubt that Bod Australia Limited (ASX:BDA) stock has had a really bad year. The share price has slid 54% in that time. We wouldn't rush to judgement on Bod Australia because we don't have a long term history to look at. The falls have accelerated recently, with the share price down 26% in the last three months.
Because Bod Australia is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. 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 does expect good top-line growth.
Bod Australia grew its revenue by 82% over the last year. That's well above most other pre-profit companies. Meanwhile, the share price slid 54%. This could mean hype has come out of the stock because the bottom line is concerning investors. Generally speaking investors would consider a stock like this less risky once it turns a profit. But when do you think that will happen?
The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).
Take a more thorough look at Bod Australia's financial health with this free report on its balance sheet.
A Different Perspective
While Bod Australia shareholders are down 54% for the year, the market itself is up 12%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 26% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. Before spending more time on Bod Australia it might be wise to click here to see if insiders have been buying or selling shares.
But note: Bod Australia 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 AU exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.