Investors one-year losses grow to 24% as the stock sheds US$560m this past week

Simply Wall St
February 18, 2022
Source: Shutterstock

Investors can approximate the average market return by buying an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. For example, the Dun & Bradstreet Holdings, Inc. (NYSE:DNB) share price is down 24% in the last year. That's well below the market return of 2.6%. Because Dun & Bradstreet Holdings 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 8.6% in a month. However, we note the price may have been impacted by the broader market, which is down 4.2% in the same time period.

Since Dun & Bradstreet Holdings has shed US$560m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

See our latest analysis for Dun & Bradstreet Holdings

Dun & Bradstreet Holdings isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Dun & Bradstreet Holdings grew its revenue by 25% over the last year. That's definitely a respectable growth rate. Meanwhile, the share price is down 24% over twelve months, which is disappointing given the progress made. This implies the market was expecting better growth. But if revenue keeps growing, then at a certain point the share price would likely follow.

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

NYSE:DNB Earnings and Revenue Growth February 18th 2022

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. You can see what analysts are predicting for Dun & Bradstreet Holdings in this interactive graph of future profit estimates.

A Different Perspective

Given that the market gained 2.6% in the last year, Dun & Bradstreet Holdings shareholders might be miffed that they lost 24%. 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 5.3% 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 Dun & Bradstreet Holdings better, we need to consider many other factors. Take risks, for example - Dun & Bradstreet Holdings has 1 warning sign we think you should be aware of.

Dun & Bradstreet Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.