AEye (NASDAQ:LIDR) one-year losses have grown faster than shareholder returns have fallen, but the stock pops 29% this past week
This month, we saw the AEye, Inc. (NASDAQ:LIDR) up an impressive 46%. But that isn't much consolation to those who have suffered through the declines of the last year. Like an arid lake in a warming world, shareholder value has evaporated, with the share price down 56% in that time. Some might say the recent bounce is to be expected after such a bad drop. It may be that the fall was an overreaction.
Although the past week has been more reassuring for shareholders, they're still in the red over the last year, so let's see if the underlying business has been responsible for the decline.
View our latest analysis for AEye
AEye 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
AEye's revenue didn't grow at all in the last year. In fact, it fell 4.4%. That looks pretty grim, at a glance. The share price drop of 56% is understandable given the company doesn't have profits to boast of. Having said that, if growth is coming in the future, the stock may have better days ahead. We have a natural aversion to companies that are losing money and shrinking revenue. But perhaps that is being too careful.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
This free interactive report on AEye's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
We doubt AEye shareholders are happy with the loss of 56% over twelve months. That falls short of the market, which lost 3.8%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 19% 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. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that AEye 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.
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