The International Cannabrands (CNSX:INCB) Share Price Is Down 83% So Some Shareholders Are Rather Upset

International Cannabrands Inc. (CNSX:INCB) shareholders will doubtless be very grateful to see the share price up 33% in the last week. But that hardly compensates for the shocking decline over the last twelve months. To wit, the stock has dropped 83% over the last year. So the rise may not be much consolation. The bigger issue is whether the company can sustain the momentum in the long term.

We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.

See our latest analysis for International Cannabrands

Because International Cannabrands is loss-making, 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. 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 International Cannabrands saw its revenue grow by 1709%. That's a strong result which is better than most other loss making companies. So the hefty 83% share price crash makes us think the company has somehow offended market participants. There's clearly something unusual going on here such as an acquisition that hasn't delivered expected profits. What is clear is that the market is not judging the company on its revenue growth right now. Of course, markets do over-react so share price drop may be too harsh.

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

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

While International Cannabrands shareholders are down 83% for the year, the market itself is up 11%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 56% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

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 CA exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.