Flowr's (CVE:FLWR) Stock Price Has Reduced 79% In The Past Year

It's not a secret that every investor will make bad investments, from time to time. But serious investors should think long and hard about avoiding extreme losses. We wouldn't blame The Flowr Corporation (CVE:FLWR) shareholders if they were still in shock after the stock dropped like a lead balloon, down 79% in just one year. That'd be enough to make even the strongest stomachs churn. We wouldn't rush to judgement on Flowr because we don't have a long term history to look at. Shareholders have had an even rougher run lately, with the share price down 16% in the last 90 days.

View our latest analysis for Flowr

Flowr 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In just one year Flowr saw its revenue fall by 25%. That looks pretty grim, at a glance. The share price fall of 79% in a year tells the story. That's a stern reminder that profitless companies need to grow the top line, at the very least. But markets do over-react, so there opportunity for investors who are willing to take the time to dig deeper and understand the business.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

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

Given that the market gained 5.3% in the last year, Flowr shareholders might be miffed that they lost 79%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 16% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand Flowr better, we need to consider many other factors. Take risks, for example - Flowr has 4 warning signs (and 2 which are potentially serious) we think you should know about.

But note: Flowr may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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. 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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