Volatility 101: Should VR Education Holdings (ISE:6VR) Shares Have Dropped 48%?

Over the last month the VR Education Holdings Plc (ISE:6VR) has been much stronger than before, rebounding by 33%. But that is minimal compensation for the share price under-performance over the last year. The cold reality is that the stock has dropped 48% in one year, under-performing the market.

View our latest analysis for VR Education Holdings

Because VR Education Holdings is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn’t make profits, we’d generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

VR Education Holdings grew its revenue by 32% over the last year. That’s definitely a respectable growth rate. Unfortunately that wasn’t good enough to stop the share price dropping 48%. This implies the market was expecting better growth. However, that’s in the past now, and it’s the future that matters most.

You can see how revenue has changed over time in the image below.

ISE:6VR Income Statement, November 20th 2019
ISE:6VR Income Statement, November 20th 2019

This free interactive report on VR Education Holdings’s balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Given that the market gained 17% in the last year, VR Education Holdings shareholders might be miffed that they lost 48%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Putting aside the last twelve months, it’s good to see the share price has rebounded by 9.1%, in the last ninety days. This could just be a bounce because the selling was too aggressive, but fingers crossed it’s the start of a new trend. Before spending more time on VR Education Holdings it might be wise to click here to see if insiders have been buying or selling shares.

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 IE exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

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