Strong week for Andrada Mining (LON:ATM) shareholders doesn't alleviate pain of one-year loss

Andrada Mining Limited (LON:ATM) shareholders should be happy to see the share price up 24% in the last week. But that doesn't change the fact that the returns over the last year have been less than pleasing. In fact, the price has declined 48% in a year, falling short of the returns you could get by investing in an index fund.

On a more encouraging note the company has added UK£9.3m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.

See our latest analysis for Andrada Mining

Given that Andrada Mining didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last twelve months, Andrada Mining increased its revenue by 43%. We think that is pretty nice growth. Unfortunately that wasn't good enough to stop the share price dropping 48%. This implies the market was expecting better growth. However, that's in the past now, and it's the future that matters most.

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

If you are thinking of buying or selling Andrada Mining stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Andrada Mining shareholders are down 48% for the year, but the market itself is up 13%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 1.2% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand Andrada Mining better, we need to consider many other factors. Even so, be aware that Andrada Mining is showing 4 warning signs in our investment analysis , and 1 of those can't be ignored...

Of course Andrada Mining may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.