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Taking the occasional loss comes part and parcel with investing on the stock market. And unfortunately for Futura Medical plc (LON:FUM) shareholders, the stock is a lot lower today than it was a year ago. To wit the share price is down 63% in that time. To make matters worse, the returns over three years have also been really disappointing (the share price is 51% lower than three years ago). Shareholders have had an even rougher run lately, with the share price down 61% in the last 90 days.
After losing 13% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.
Check out our latest analysis for Futura Medical
Futura Medical wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually desire strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.
In the last year Futura Medical saw its revenue grow by 393%. That's a strong result which is better than most other loss making companies. Meanwhile, the share price slid 63%. 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 company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
Investors in Futura Medical had a tough year, with a total loss of 63%, against a market gain of about 19%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 0.9%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Futura Medical (of which 1 is a bit unpleasant!) you should know about.