Every investor on earth makes bad calls sometimes. But really bad investments should be rare. So spare a thought for the long term shareholders of MoxieTech Group AB (publ) (STO:MOXI); the share price is down a whopping 74% in the last three years. That would certainly shake our confidence in the decision to own the stock. The more recent news is of little comfort, with the share price down 64% in a year. The falls have accelerated recently, with the share price down 44% in the last three months. This could be related to the recent financial results – you can catch up on the most recent data by reading our company report.
MoxieTech Group isn’t currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last three years, MoxieTech Group saw its revenue grow by 15% per year, compound. That’s a fairly respectable growth rate. So it seems unlikely the 36% share price drop (each year) is entirely about 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.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
If you are thinking of buying or selling MoxieTech Group stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Over the last year, MoxieTech Group shareholders took a loss of 64%. In contrast the market gained about 31%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. The three-year loss of 36% per year isn’t as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. Although Warren Buffett famously said he likes to ‘buy when there is blood on the streets’, he also focusses on high quality stocks with solid prospects. You could get a better understanding of MoxieTech Group’s growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on SE exchanges.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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