Investors in Arqit Quantum (NASDAQ:ARQQ) have unfortunately lost 80% over the last year
It's not a secret that every investor will make bad investments, from time to time. But it should be a priority to avoid stomach churning catastrophes, wherever possible. It must have been painful to be a Arqit Quantum Inc. (NASDAQ:ARQQ) shareholder over the last year, since the stock price plummeted 80% in that time. That'd be enough to make even the strongest stomachs churn. Arqit Quantum hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. Unfortunately the share price momentum is still quite negative, with prices down 19% in thirty 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.
See our latest analysis for Arqit Quantum
Because Arqit Quantum 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Arqit Quantum's revenue didn't grow at all in the last year. In fact, it fell 64%. That looks like a train-wreck result to investors far and wide. The market didn't mess around, sending shares down the garbage shute. (Or down 80% to be specific). Our mindset doesn't have a lot of time for stocks like this. While some losers redeem themselves, most remain losers and we prefer winners anyway.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
Given that the market gained 15% in the last year, Arqit Quantum shareholders might be miffed that they lost 80%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 2.4% 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. Like risks, for instance. Every company has them, and we've spotted 5 warning signs for Arqit Quantum (of which 2 make us uncomfortable!) you should know about.
But note: Arqit Quantum may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American 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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