Strong week for Kooth (LON:KOO) shareholders doesn't alleviate pain of one-year loss

It is a pleasure to report that the Kooth plc (LON:KOO) is up 69% in the last quarter. But that doesn't change the reality of under-performance over the last twelve months. In fact, the price has declined 11% in a year, falling short of the returns you could get by investing in an index fund.

Although the past week has been more reassuring for shareholders, they're still in the red over the last year, so let's see if the underlying business has been responsible for the decline.

Check out our latest analysis for Kooth

Kooth 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. 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.

Kooth grew its revenue by 18% over the last year. That's definitely a respectable growth rate. Meanwhile, the share price is down 11% over twelve months, which is disappointing given the progress made. This implies the market was expecting better growth. But if revenue keeps growing, then at a certain point the share price would likely follow.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

This free interactive report on Kooth's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

We doubt Kooth shareholders are happy with the loss of 11% over twelve months. That falls short of the market, which lost 1.4%. 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 69% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). It's always interesting to track share price performance over the longer term. But to understand Kooth better, we need to consider many other factors. Take risks, for example - Kooth has 3 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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