The Formula One Group (NASDAQ:FWON.K) Share Price Has Gained 19% And Shareholders Are Hoping For More

Investors can buy low cost index fund if they want to receive the average market return. But in any diversified portfolio of stocks, you'll see some that fall short of the average. Unfortunately for shareholders, while the Formula One Group (NASDAQ:FWON.K) share price is up 19% in the last three years, that falls short of the market return. Unfortunately, the share price has fallen 9.1% over twelve months.

Check out our latest analysis for Formula One Group

Because Formula One Group 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. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last 3 years Formula One Group saw its revenue grow at 10% per year. That's a very respectable growth rate. The annual gain of 6% over three years is better than nothing, but hardly impresses. So it's possible that expectations were elevated in the past, muting returns over three years. Of course, if the company can tread the path to profitability, then the current price might be too pessimistic.

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

If you are thinking of buying or selling Formula One Group stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Formula One Group shareholders are down 9.1% for the year, but the broader market is up 26%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Fortunately the longer term story is brighter, with total returns averaging about 6% per year over three years. Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. It's always interesting to track share price performance over the longer term. But to understand Formula One Group better, we need to consider many other factors. Even so, be aware that Formula One Group is showing 1 warning sign in our investment analysis , you should know about...

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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. 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.
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