It's not a secret that every investor will make bad investments, from time to time. But it would be foolish to simply accept every extremely large loss as an inevitable part of the game. It must have been painful to be a Anghami Inc. (NASDAQ:ANGH) shareholder over the last year, since the stock price plummeted 71% in that time. That'd be a striking reminder about the importance of diversification. Anghami hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. Shareholders have had an even rougher run lately, with the share price down 59% in the last 90 days.
So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.
Anghami isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last year Anghami saw its revenue grow by 16%. That's definitely a respectable growth rate. Unfortunately, the market wanted something better, given it sent the share price 71% lower during the year. It could be that the losses are too much for investors to handle without losing their nerve. We'd posit that the future looks challenging, given the disconnect between revenue growth and the share price.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Take a more thorough look at Anghami's financial health with this free report on its balance sheet.
A Different Perspective
Anghami shareholders are down 71% for the year, even worse than the market loss of 8.9%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. With the stock down 59% 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. 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. Even so, be aware that Anghami is showing 4 warning signs in our investment analysis , and 3 of those are a bit concerning...
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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.
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