Prospa Group (ASX:PGL) Share Prices Have Dropped 51% In The Last Year

Prospa Group Limited (ASX:PGL) shareholders should be happy to see the share price up 27% in the last quarter. But that isn't much consolation to those who have suffered through the declines of the last year. During that time the share price has sank like a stone, descending 51%. It's not that amazing to see a bounce after a drop like that. Of course, it could be that the fall was overdone.

Check out our latest analysis for Prospa Group

Because Prospa Group made a loss in the last twelve months, 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.

In just one year Prospa Group saw its revenue fall by 18%. That's not what investors generally want to see. In the absence of profits, it's not unreasonable that the share price fell 51%. Having said that, if growth is coming in the future, the stock may have better days ahead. We have a natural aversion to companies that are losing money and shrinking revenue. But perhaps that is being too careful.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So it makes a lot of sense to check out what analysts think Prospa Group will earn in the future (free profit forecasts).

A Different Perspective

While Prospa Group shareholders are down 51% for the year, the market itself is up 4.2%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. It's great to see a nice little 27% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

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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