Further weakness as AvePoint (NASDAQ:AVPT) drops 10% this week, taking one-year losses to 19%
It's easy to match the overall market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Unfortunately the AvePoint, Inc. (NASDAQ:AVPT) share price slid 19% over twelve months. That falls noticeably short of the market return of around 30%. We wouldn't rush to judgement on AvePoint because we don't have a long term history to look at. On top of that, the share price is down 10% in the last week.
After losing 10% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.
See our latest analysis for AvePoint
AvePoint isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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.
In the last twelve months, AvePoint increased its revenue by 27%. We think that is pretty nice growth. Unfortunately that wasn't good enough to stop the share price dropping 19%. This implies the market was expecting better growth. But if revenue keeps growing, then at a certain point the share price would likely follow.
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 probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. If you are thinking of buying or selling AvePoint stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
While AvePoint shareholders are down 19% for the year, the market itself is up 30%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. The share price decline has continued throughout the most recent three months, down 7.5%, suggesting an absence of enthusiasm from investors. 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. For example, we've discovered 3 warning signs for AvePoint (1 is a bit unpleasant!) that you should be aware of before investing here.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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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