Amidst increasing losses, Investors bid up Rivalry (CVE:RVLY) 22% this past week

Rivalry Corp. (CVE:RVLY) shareholders should be happy to see the share price up 22% in the last week. But that doesn't change the fact that the returns over the last year have been less than pleasing. The cold reality is that the stock has dropped 25% in one year, under-performing the market.

While the stock has risen 22% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

See our latest analysis for Rivalry

Rivalry isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last year Rivalry saw its revenue grow by 110%. That's a strong result which is better than most other loss making companies. Given the revenue growth, the share price drop of 25% seems quite harsh. Our sympathies to shareholders who are now underwater. On the bright side, if this company is moving profits in the right direction, top-line growth like that could be an opportunity. Our monkey brains haven't evolved to think exponentially, so humans do tend to underestimate companies that have exponential growth.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. This free report showing analyst forecasts should help you form a view on Rivalry

A Different Perspective

Rivalry shareholders are down 25% for the year, even worse than the market loss of 1.6%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. It's great to see a nice little 12% rebound in the last three months. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. 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. Even so, be aware that Rivalry is showing 3 warning signs in our investment analysis , and 1 of those is concerning...

Rivalry is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA 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.