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- NasdaqGS:AFRM
Affirm Holdings (NASDAQ:AFRM investor one-year losses grow to 73% as the stock sheds US$1.5b this past week
Affirm Holdings, Inc. (NASDAQ:AFRM) shareholders will doubtless be very grateful to see the share price up 59% in the last month. But that doesn't change the fact that the returns over the last year have been stomach churning. During that time the share price has plummeted like a stone, down 73%. Arguably, the recent bounce is to be expected after such a bad drop. Only time will tell if the company can sustain the turnaround.
If the past week is anything to go by, investor sentiment for Affirm Holdings isn't positive, so let's see if there's a mismatch between fundamentals and the share price.
See our latest analysis for Affirm Holdings
Because Affirm Holdings 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 year Affirm Holdings saw its revenue grow by 49%. That's a strong result which is better than most other loss making companies. So the hefty 73% share price crash makes us think the company has somehow offended market participants. Something weird is definitely impacting the stock price; we'd venture the company has destroyed value somehow. What is clear is that the market is not judging the company on its revenue growth right now. Of course, investors do over-react when they are stressed out, so the sell-off could be unjustifiably severe.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
Affirm Holdings shareholders are down 73% for the year, even worse than the market loss of 9.4%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. The share price decline has continued throughout the most recent three months, down 5.8%, 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. It's always interesting to track share price performance over the longer term. But to understand Affirm Holdings better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Affirm Holdings you should be aware of, and 1 of them is a bit concerning.
But note: Affirm Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
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.
About NasdaqGS:AFRM
Affirm Holdings
Operates payment network in the United States, Canada, and internationally.
Reasonable growth potential with mediocre balance sheet.