Yahoo Finance MedAdvisor (ASX:MDR investor one-year losses grow to 56% as the stock sheds AU$11m this past week
While not a mind-blowing move, it is good to see that the MedAdvisor Limited (ASX:MDR) share price has gained 21% in the last three months. But that's not enough to compensate for the decline over the last twelve months. Specifically, the stock price slipped by 56% in that time. So the bounce should be viewed in that context. It may be that the fall was an overreaction.
After losing 11% 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 MedAdvisor
MedAdvisor isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last twelve months, MedAdvisor increased its revenue by 75%. That's a strong result which is better than most other loss making companies. Meanwhile, the share price slid 56%. Typically a growth stock like this will be volatile, with some shareholders concerned about the red ink on the bottom line (that is, the losses). 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 graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
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
While the broader market gained around 2.5% in the last year, MedAdvisor shareholders lost 56%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 8% over the last half decade. 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - MedAdvisor has 2 warning signs we think you should be aware of.
Of course MedAdvisor may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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