The nature of investing is that you win some, and you lose some. And there's no doubt that Alkami Technology, Inc. (NASDAQ:ALKT) stock has had a really bad year. In that relatively short period, the share price has plunged 62%. Because Alkami Technology hasn't been listed for many years, the market is still learning about how the business performs. The falls have accelerated recently, with the share price down 22% in the last three months. However, one could argue that the price has been influenced by the general market, which is down 12% in the same timeframe.
On a more encouraging note the company has added US$68m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.
Given that Alkami Technology didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Alkami Technology grew its revenue by 34% over the last year. That's definitely a respectable growth rate. Unfortunately it seems investors wanted more, because the share price is down 62% in that time. It may well be that the business remains approximately on track, but its revenue growth has simply been delayed. To our minds it isn't enough to just look at revenue, anyway. Always consider when profits will flow.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
This free interactive report on Alkami Technology's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Alkami Technology shareholders are down 62% for the year, even worse than the market loss of 12%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. The share price decline has continued throughout the most recent three months, down 22%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. It's always interesting to track share price performance over the longer term. But to understand Alkami Technology better, we need to consider many other factors. Take risks, for example - Alkami Technology has 4 warning signs we think you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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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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.