Further weakness as Aker Horizons (OB:AKH) drops 4.4% this week, taking one-year losses to 47%

Investors can approximate the average market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Investors in Aker Horizons ASA (OB:AKH) have tasted that bitter downside in the last year, as the share price dropped 47%. That falls noticeably short of the market return of around 10%. We wouldn't rush to judgement on Aker Horizons because we don't have a long term history to look at. Shareholders have had an even rougher run lately, with the share price down 12% in the last 90 days.

After losing 4.4% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

However if you'd rather see where the opportunities and risks are within AKH's industry, you can check out our analysis on the NO Commercial Services industry.

Because Aker Horizons made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good 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.

In the last year Aker Horizons saw its revenue grow by 195%. That's well above most other pre-profit companies. Given the revenue growth, the share price drop of 47% seems quite harsh. Our sympathies to shareholders who are now underwater. On the bright side, if this company is moving profits in the right direction, top-line growth like that could be an opportunity. Our monkey brains haven't evolved to think exponentially, so humans do tend to underestimate companies that have exponential growth.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Take a more thorough look at Aker Horizons' financial health with this free report on its balance sheet.

A Different Perspective

While Aker Horizons shareholders are down 47% for the year, the market itself is up 10%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. With the stock down 12% 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. 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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Aker Horizons (of which 1 is significant!) you should know about.

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 NO 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.