Nanoco Group (LON:NANO shareholders incur further losses as stock declines 10% this week, taking one-year losses to 58%

Even the best stock pickers will make plenty of bad investments. And unfortunately for Nanoco Group plc (LON:NANO) shareholders, the stock is a lot lower today than it was a year ago. The share price is down a hefty 58% in that time. The silver lining (for longer term investors) is that the stock is still 3.3% higher than it was three years ago. The last week also saw the share price slip down another 10%.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

See our latest analysis for Nanoco Group

Nanoco Group 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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.

Nanoco Group grew its revenue by 34% over the last year. That's definitely a respectable growth rate. Unfortunately it seems investors wanted more, because the share price is down 58% in that time. It is of course possible that the business will still deliver strong growth, it will just take longer than expected to do it. For us it's important to consider when you think a company will become profitable, if you're basing your valuation on revenue.

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

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

A Different Perspective

While the broader market lost about 3.4% in the twelve months, Nanoco Group shareholders did even worse, losing 58%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 8% 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. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Nanoco Group is showing 2 warning signs in our investment analysis , you should know about...

Of course Nanoco Group 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.