Shareholders in Fluent (NASDAQ:FLNT) have lost 63%, as stock drops 12% this past week
Investing in stocks comes with the risk that the share price will fall. Anyone who held Fluent, Inc. (NASDAQ:FLNT) over the last year knows what a loser feels like. The share price has slid 63% in that time. To make matters worse, the returns over three years have also been really disappointing (the share price is 53% lower than three years ago). On top of that, the share price is down 12% in the last week.
Since Fluent has shed US$22m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.
Check out our latest analysis for Fluent
Given that Fluent 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last year Fluent saw its revenue grow by 0.9%. That's not a very high growth rate considering it doesn't make profits. Without profits, and with revenue growth sluggish, you get a 63% loss for shareholders, over the year. We'd want to see evidence that future revenue growth will be stronger before getting too interested. When a stock falls hard like this, it can signal an over-reaction. Our preference is to wait for a fundamental improvements before buying, but now could be a good time for some research.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. You can see what analysts are predicting for Fluent in this interactive graph of future profit estimates.
A Different Perspective
While the broader market gained around 21% in the last year, Fluent shareholders lost 63%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 8% over the last half decade. 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. 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 2 warning signs for Fluent that you should be aware of before investing here.
But note: Fluent 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 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.
