It's not a secret that every investor will make bad investments, from time to time. But it's not unreasonable to try to avoid truly shocking capital losses. It must have been painful to be a Genius Sports Limited (NYSE:GENI) shareholder over the last year, since the stock price plummeted 82% in that time. That'd be enough to make even the strongest stomachs churn. Genius Sports 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 44% 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.
It's worthwhile assessing if the company's economics have been moving in lockstep with these underwhelming shareholder returns, or if there is some disparity between the two. So let's do just that.
See our latest analysis for Genius Sports
Because Genius Sports 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Genius Sports grew its revenue by 75% over the last year. That's well above most other pre-profit companies. So the hefty 82% 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.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
This free interactive report on Genius Sports' balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Genius Sports shareholders are down 82% for the year, even worse than the market loss of 9.0%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. With the stock down 44% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand Genius Sports better, we need to consider many other factors. For example, we've discovered 3 warning signs for Genius Sports that you should be aware of before investing here.
But note: Genius Sports 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.