Goodfood Market (TSE:FOOD) one-year losses have grown faster than shareholder returns have fallen, but the stock swells 16% this past week

By
Simply Wall St
Published
March 22, 2022
TSX:FOOD
Source: Shutterstock

Goodfood Market Corp. (TSE:FOOD) shareholders should be happy to see the share price up 16% in the last week. But that isn't much consolation for the painful drop we've seen in the last year. To wit, the stock has dropped 72% over the last year. It's not uncommon to see a bounce after a drop like that. Only time will tell if the company can sustain the turnaround.

While the stock has risen 16% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

View our latest analysis for Goodfood Market

Because Goodfood Market 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Goodfood Market grew its revenue by 13% over the last year. While that may seem decent it isn't great considering the company is still making a loss. Even so you could argue that it's surprising that the share price has tanked 72%. We'd venture this growth was too low to give holders confidence that profitability is on the horizon. But if it will make money, albeit later than previously believed, this could be an opportunity.

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

earnings-and-revenue-growth
TSX:FOOD Earnings and Revenue Growth March 22nd 2022

Take a more thorough look at Goodfood Market's financial health with this free report on its balance sheet.

A Different Perspective

Over the last year, Goodfood Market shareholders took a loss of 72%. In contrast the market gained about 20%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Shareholders have lost 8% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. Although Baron Rothschild famously said to "buy when there's blood in the streets, even if the blood is your own", he also focusses on high quality stocks with solid prospects. 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. For instance, we've identified 3 warning signs for Goodfood Market that you should be aware of.

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.

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