Loss-making Shapeways Holdings (NYSE:SHPW) sheds a further US$8.8m, taking total shareholder losses to 86% over 1 year

As every investor would know, you don't hit a homerun every time you swing. But serious investors should think long and hard about avoiding extreme losses. So spare a thought for the long term shareholders of Shapeways Holdings, Inc. (NYSE:SHPW); the share price is down a whopping 86% in the last twelve months. That'd be a striking reminder about the importance of diversification. Shapeways Holdings may have better days ahead, of course; we've only looked at a one year period. The falls have accelerated recently, with the share price down 40% in the last three months. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report. While a drop like that is definitely a body blow, money isn't as important as health and happiness.

Since Shapeways Holdings has shed US$8.8m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

View our latest analysis for Shapeways Holdings

Shapeways 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Shapeways Holdings' revenue didn't grow at all in the last year. In fact, it fell 0.8%. That looks pretty grim, at a glance. The share price fall of 86% in a year tells the story. Holders should not lose the lesson: loss making companies should grow revenue. But markets do over-react, so there opportunity for investors who are willing to take the time to dig deeper and understand the business.

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

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

A Different Perspective

Shapeways Holdings shareholders are down 86% for the year, even worse than the market loss of 16%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. The share price decline has continued throughout the most recent three months, down 40%, 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. 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. For example, we've discovered 3 warning signs for Shapeways Holdings (1 is concerning!) that you should be aware of before investing here.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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