Home Point Capital (NASDAQ:HMPT) shareholders have endured a 64% loss from investing in the stock a year ago
Over the last month the Home Point Capital Inc. (NASDAQ:HMPT) has been much stronger than before, rebounding by 74%. But that's small comfort given the dismal price performance over the last year. Like a receding glacier in a warming world, the share price has melted 65% in that period. It's not that amazing to see a bounce after a drop like that. Arguably, the fall was overdone.
Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns.
View our latest analysis for Home Point Capital
Because Home Point Capital made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. 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.
In just one year Home Point Capital saw its revenue fall by 60%. That looks like a train-wreck result to investors far and wide. Arguably, the market has responded appropriately to this performance by sending the share price down 65% in the same time period. Buying shares in loss making companies with falling revenue is often called speculation, not investing. So we'll be looking for strong improvements on the numbers before getting excited.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
This free interactive report on Home Point Capital's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
We doubt Home Point Capital shareholders are happy with the loss of 64% over twelve months. That falls short of the market, which lost 15%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. Putting aside the last twelve months, it's good to see the share price has rebounded by 6.2%, in the last ninety days. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). 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. For example, we've discovered 1 warning sign for Home Point Capital 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.
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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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