Aerometrex's(ASX:AMX) Share Price Is Down 47% Over The Past Year.

Investors can approximate the average market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. That downside risk was realized by Aerometrex Limited (ASX:AMX) shareholders over the last year, as the share price declined 47%. That's well below the market decline of 2.8%. Aerometrex may have better days ahead, of course; we've only looked at a one year period. The silver lining is that the stock is up 1.3% in about a week.

See our latest analysis for Aerometrex

Aerometrex 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last year Aerometrex saw its revenue grow by 24%. That's definitely a respectable growth rate. Unfortunately that wasn't good enough to stop the share price dropping 47%. You might even wonder if the share price was previously over-hyped. 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).

If you are thinking of buying or selling Aerometrex stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Given that the market gained 2.8% in the last year, Aerometrex shareholders might be miffed that they lost 47%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 8.1% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Aerometrex , and understanding them should be part of your investment process.

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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. 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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