How Much Did Bubs Australia's(ASX:BUB) Shareholders Earn From Share Price Movements Over The Last Year?

Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Unfortunately the Bubs Australia Limited (ASX:BUB) share price slid 41% over twelve months. That falls noticeably short of the market return of around 3.7%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 23% in three years. Furthermore, it's down 23% in about a quarter. That's not much fun for holders.

View our latest analysis for Bubs Australia

Bubs Australia wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. 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.

Bubs Australia grew its revenue by 24% over the last year. That's definitely a respectable growth rate. Unfortunately that wasn't good enough to stop the share price dropping 41%. 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.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. So it makes a lot of sense to check out what analysts think Bubs Australia will earn in the future (free profit forecasts).

A Different Perspective

Bubs Australia shareholders are down 41% for the year, but the broader market is up 3.7%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The three-year loss of 7% 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. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - Bubs Australia has 2 warning signs we think you should be aware of.

Of course Bubs Australia 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.

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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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