Increasing losses over year doesn't faze Nuix (ASX:NXL) investors as stock soars 11% this past week

Nuix Limited (ASX:NXL) shareholders should be happy to see the share price up 23% in the last quarter. But that doesn't change the fact that the returns over the last year have been disappointing. Specifically, the stock price slipped by 63% in that time. The share price recovery is not so impressive when you consider the fall. You could argue that the sell-off was too severe.

The recent uptick of 11% could be a positive sign of things to come, so let's take a look at historical fundamentals.

Check out our latest analysis for Nuix

Given that Nuix didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Nuix's revenue didn't grow at all in the last year. In fact, it fell 13%. That's not what investors generally want to see. The share price drop of 63% is understandable given the company doesn't have profits to boast of. 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. This free report showing analyst forecasts should help you form a view on Nuix

A Different Perspective

We doubt Nuix shareholders are happy with the loss of 63% over twelve months. That falls short of the market, which lost 0.4%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. It's great to see a nice little 23% 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). 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. Case in point: We've spotted 1 warning sign for Nuix you should be aware of.

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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.