1stdibs.Com (NASDAQ:DIBS) investors are sitting on a loss of 33% if they invested a year ago
The simplest way to benefit from a rising market is to buy an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Investors in 1stdibs.Com, Inc. (NASDAQ:DIBS) have tasted that bitter downside in the last year, as the share price dropped 33%. That contrasts poorly with the market return of 15%. 1stdibs.Com hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time.
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 1stdibs.Com
Because 1stdibs.Com 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In just one year 1stdibs.Com saw its revenue fall by 11%. That's not what investors generally want to see. The stock price has languished lately, falling 33% in a year. What would you expect when revenue is falling, and it doesn't make a profit? We think most holders must believe revenue growth will improve, or else costs will decline.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
This free interactive report on 1stdibs.Com's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Given that the market gained 15% in the last year, 1stdibs.Com shareholders might be miffed that they lost 33%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. It's great to see a nice little 2.6% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). 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. Case in point: We've spotted 4 warning signs for 1stdibs.Com you should be aware of, and 1 of them doesn't sit too well with us.
But note: 1stdibs.Com 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 American 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.
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