If You Had Bought International Meal Company Alimentação's (BVMF:MEAL3) Shares A Year Ago You Would Be Down 51%

While it may not be enough for some shareholders, we think it is good to see the International Meal Company Alimentação S.A. (BVMF:MEAL3) share price up 24% in a single quarter. But that's not enough to compensate for the decline over the last twelve months. Specifically, the stock price slipped by 51% in that time. So the bounce should be viewed in that context. Arguably, the fall was overdone.

Check out our latest analysis for International Meal Company Alimentação

Because International Meal Company Alimentação 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. 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.

International Meal Company Alimentação's revenue didn't grow at all in the last year. In fact, it fell 21%. That looks pretty grim, at a glance. In the absence of profits, it's not unreasonable that the share price fell 51%. Fingers crossed this is the low ebb for the stock. We have a natural aversion to companies that are losing money and shrinking revenue. But perhaps that is being too careful.

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

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

International Meal Company Alimentação shareholders are down 51% for the year, but the market itself is up 4.7%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 3% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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. Even so, be aware that International Meal Company Alimentação is showing 2 warning signs in our investment analysis , and 1 of those can't be ignored...

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 BR 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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