Intuitive Machines (NASDAQ:LUNR investor one-year losses grow to 28% as the stock sheds US$18m this past week

The simplest way to benefit from a rising market is to buy an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. Investors in Intuitive Machines, Inc. (NASDAQ:LUNR) have tasted that bitter downside in the last year, as the share price dropped 28%. That contrasts poorly with the market return of 2.8%. Because Intuitive Machines hasn't been listed for many years, the market is still learning about how the business performs. More recently, the share price has dropped a further 27% in a month.

Since Intuitive Machines has shed US$18m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

Check out our latest analysis for Intuitive Machines

Given that Intuitive Machines 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. 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.

In the last year Intuitive Machines saw its revenue grow by 14%. We think that is pretty nice growth. Unfortunately that wasn't good enough to stop the share price dropping 28%. You might even wonder if the share price was previously over-hyped. However, that's in the past now, and it's the future that matters most.

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

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. This free report showing analyst forecasts should help you form a view on Intuitive Machines

A Different Perspective

While Intuitive Machines shareholders are down 28% for the year, the market itself is up 2.8%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The share price decline has continued throughout the most recent three months, down 9.7%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. 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. For example, we've discovered 4 warning signs for Intuitive Machines (2 can't be ignored!) that you should be aware of before investing here.

Of course Intuitive Machines 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 American exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.