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Shareholders in Electrameccanica Vehicles (NASDAQ:SOLO) are in the red if they invested a year ago

Electrameccanica Vehicles Corp. (NASDAQ:SOLO) shareholders should be happy to see the share price up 24% in the last month. But that isn't much consolation to those who have suffered through the declines of the last year. Specifically, the stock price slipped by 55% in that time. It's not that amazing to see a bounce after a drop like that. You could argue that the sell-off was too severe.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

Check out our latest analysis for Electrameccanica Vehicles

Given that Electrameccanica Vehicles 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last year Electrameccanica Vehicles saw its revenue grow by 270%. That's a strong result which is better than most other loss making companies. In contrast the share price is down 55% over twelve months. Yes, the market can be a fickle mistress. This could mean hype has come out of the stock because the bottom line is concerning investors. Generally speaking investors would consider a stock like this less risky once it turns a profit. But when do you think that will happen?

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth
earnings-and-revenue-growth

Take a more thorough look at Electrameccanica Vehicles' financial health with this free report on its balance sheet.

A Different Perspective

The last twelve months weren't great for Electrameccanica Vehicles shares, which cost holders 55%, while the market was up about 6.4%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The three-year loss of 11% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. 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 instance, we've identified 2 warning signs for Electrameccanica Vehicles that you should be aware of.

Of course Electrameccanica Vehicles may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.