Investors can approximate the average market return by buying an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. For example, the Radius Global Infrastructure, Inc. (NASDAQ:RADI) share price is down 43% in the last year. That contrasts poorly with the market decline of 18%. Longer term investors have fared much better, since the share price is up 6.5% in three years. The falls have accelerated recently, with the share price down 35% in the last three months.
After losing 9.0% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.
Because Radius Global Infrastructure 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Radius Global Infrastructure grew its revenue by 41% over the last year. We think that is pretty nice growth. Unfortunately that wasn't good enough to stop the share price dropping 43%. This implies the market was expecting better growth. But if revenue keeps growing, then at a certain point the share price would likely follow.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized 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. So it makes a lot of sense to check out what analysts think Radius Global Infrastructure will earn in the future (free profit forecasts).
A Different Perspective
Radius Global Infrastructure shareholders are down 43% for the year, falling short of the market return. Meanwhile, the broader market slid about 18%, likely weighing on the stock. Fortunately the longer term story is brighter, with total returns averaging about 2.1% per year over three years. Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. It's always interesting to track share price performance over the longer term. But to understand Radius Global Infrastructure better, we need to consider many other factors. For instance, we've identified 3 warning signs for Radius Global Infrastructure (1 is a bit unpleasant) that you should be aware of.
We will like Radius Global Infrastructure better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
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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