Shareholders in Robinhood Markets (NASDAQ:HOOD) have lost 34%, as stock drops 7.9% this past week

It's easy to match the overall market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. Unfortunately the Robinhood Markets, Inc. (NASDAQ:HOOD) share price slid 34% over twelve months. That's well below the market decline of 13%. Robinhood Markets may have better days ahead, of course; we've only looked at a one year period. More recently, the share price has dropped a further 13% in a month. Importantly, this could be a market reaction to the recently released financial results. You can check out the latest numbers in our company report.

After losing 7.9% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

See our latest analysis for Robinhood Markets

Robinhood Markets isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Robinhood Markets' revenue didn't grow at all in the last year. In fact, it fell 25%. That looks pretty grim, at a glance. Shareholders have seen the share price drop 34% in that time. What would you expect when revenue is falling, and it doesn't make a profit? We think most holders must believe revenue growth will improve, or else costs will decline.

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

Robinhood Markets is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

Robinhood Markets shareholders are down 34% for the year, even worse than the market loss of 13%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. It's great to see a nice little 7.8% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). 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. Case in point: We've spotted 1 warning sign for Robinhood Markets you should be aware of.

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 American 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.