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Sonim Technologies (NASDAQ:SONM) Share Prices Have Dropped 56% In The Last Year

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Simply Wall St
·3 min read
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Sonim Technologies, Inc. (NASDAQ:SONM) shareholders will doubtless be very grateful to see the share price up 146% in the last quarter. But that isn't much consolation to those who have suffered through the declines of the last year. Like a receding glacier in a warming world, the share price has melted 56% in that period. Some might say the recent bounce is to be expected after such a bad drop. Of course, it could be that the fall was overdone.

See our latest analysis for Sonim Technologies

Sonim Technologies isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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.

Sonim Technologies' revenue didn't grow at all in the last year. In fact, it fell 55%. If you think that's a particularly bad result, you're statistically on the money Arguably, the market has responded appropriately to this performance by sending the share price down 56% in the same time period. Buying shares in loss making companies with falling revenue is often called speculation, not investing. This company will really need to improve on the numbers before we get excited about it.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

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

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. This free report showing analyst forecasts should help you form a view on Sonim Technologies

A Different Perspective

While Sonim Technologies shareholders are down 56% for the year, the market itself is up 31%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Putting aside the last twelve months, it's good to see the share price has rebounded by 146%, 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). It's always interesting to track share price performance over the longer term. But to understand Sonim Technologies better, we need to consider many other factors. Take risks, for example - Sonim Technologies has 3 warning signs (and 1 which can't be ignored) we think you should know about.

Sonim Technologies is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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

This article by Simply Wall St is general in nature. 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.

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