Would Shareholders Who Purchased mCloud Technologies' (CVE:MCLD) Stock Year Be Happy With The Share price Today?

It is doubtless a positive to see that the mCloud Technologies Corp. (CVE:MCLD) share price has gained some 36% in the last three months. But that's not enough to compensate for the decline over the last twelve months. Like an arid lake in a warming world, shareholder value has evaporated, with the share price down 52% in that time. It's not that amazing to see a bounce after a drop like that. It may be that the fall was an overreaction.

View our latest analysis for mCloud Technologies

mCloud Technologies wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last twelve months, mCloud Technologies increased its revenue by 212%. That's well above most other pre-profit companies. In contrast the share price is down 52% over twelve months. Yes, the market can be a fickle mistress. Typically a growth stock like this will be volatile, with some shareholders concerned about the red ink on the bottom line (that is, the losses). Generally speaking investors would consider a stock like this less risky once it turns a profit. But when do you think that will happen?

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

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free report showing analyst forecasts should help you form a view on mCloud Technologies

A Different Perspective

mCloud Technologies shareholders are down 52% for the year, but the broader market is up 20%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Shareholders have lost 9% 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. Take risks, for example - mCloud Technologies has 4 warning signs (and 2 which are a bit unpleasant) we think you should know about.

mCloud Technologies is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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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