CM.com (AMS:CMCOM shareholders incur further losses as stock declines 18% this week, taking one-year losses to 60%

Even the best stock pickers will make plenty of bad investments. Unfortunately, shareholders of CM.com N.V. (AMS:CMCOM) have suffered share price declines over the last year. The share price is down a hefty 60% in that time. We wouldn't rush to judgement on CM.com because we don't have a long term history to look at. The falls have accelerated recently, with the share price down 36% in the last three months.

If the past week is anything to go by, investor sentiment for CM.com isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

See our latest analysis for CM.com

CM.com 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last year CM.com saw its revenue grow by 67%. That's well above most other pre-profit companies. In contrast the share price is down 60% 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). We'd definitely consider it a positive if the company is trending towards profitability. If you can see that happening, then perhaps consider adding this stock to your watchlist.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

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

A Different Perspective

We doubt CM.com shareholders are happy with the loss of 60% over twelve months. That falls short of the market, which lost 21%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. With the stock down 36% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand CM.com better, we need to consider many other factors. For example, we've discovered 2 warning signs for CM.com that you should be aware of before investing here.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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