This week we saw the Mawson Infrastructure Group, Inc. (NASDAQ:MIGI) share price climb by 10%. But that's small comfort given the dismal price performance over the last year. Like a receding glacier in a warming world, the share price has melted 69% in that period. The share price recovery is not so impressive when you consider the fall. Arguably, the fall was overdone.
On a more encouraging note the company has added US$23m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.
Because Mawson Infrastructure 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. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Mawson Infrastructure Group grew its revenue by 627% over the last year. That's well above most other pre-profit companies. In contrast the share price is down 69% over twelve months. Yes, the market can be a fickle mistress. Typically a growth stock like this will be volatile, with some shareholders concerned about the red ink on the bottom line (that is, the losses). Generally speaking investors would consider a stock like this less risky once it turns a profit. But when do you think that will happen?
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
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. If you are thinking of buying or selling Mawson Infrastructure Group stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
While Mawson Infrastructure Group shareholders are down 69% for the year, the market itself is up 1.4%. 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 55% over the last three months, the market doesn't seem to believe that the company has solved all its problems. 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 Mawson Infrastructure Group better, we need to consider many other factors. Even so, be aware that Mawson Infrastructure Group is showing 3 warning signs in our investment analysis , you should know about...
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 US exchanges.
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.