Further weakness as Akoustis Technologies (NASDAQ:AKTS) drops 15% this week, taking one-year losses to 60%
Investing in stocks comes with the risk that the share price will fall. And unfortunately for Akoustis Technologies, Inc. (NASDAQ:AKTS) shareholders, the stock is a lot lower today than it was a year ago. To wit the share price is down 60% in that time. At least the damage isn't so bad if you look at the last three years, since the stock is down 30% in that time. Unfortunately the share price momentum is still quite negative, with prices down 29% in thirty days.
If the past week is anything to go by, investor sentiment for Akoustis Technologies isn't positive, so let's see if there's a mismatch between fundamentals and the share price.
See our latest analysis for Akoustis Technologies
Akoustis Technologies 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 expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last year Akoustis Technologies saw its revenue grow by 282%. That's a strong result which is better than most other loss making companies. Meanwhile, the share price slid 60%. 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). We'd definitely consider it a positive if the company is trending towards profitability. If you can see that happening, then perhaps consider adding this stock to your watchlist.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. This free report showing analyst forecasts should help you form a view on Akoustis Technologies
A Different Perspective
We regret to report that Akoustis Technologies shareholders are down 60% for the year. Unfortunately, that's worse than the broader market decline of 4.6%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 9% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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. Case in point: We've spotted 4 warning signs for Akoustis Technologies you should be aware of, and 1 of them shouldn't be ignored.
Akoustis Technologies is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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.
