Even the best stock pickers will make plenty of bad investments. And unfortunately for Blue Apron Holdings, Inc. (NYSE:APRN) shareholders, the stock is a lot lower today than it was a year ago. In that relatively short period, the share price has plunged 66%. Because Blue Apron Holdings hasn't been listed for many years, the market is still learning about how the business performs. On top of that, the share price has dropped a further 16% in a month.
Blue Apron Holdings isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Blue Apron Holdings's revenue didn't grow at all in the last year. In fact, it fell 29%. That's not what investors generally want to see. In the absence of profits, it's not unreasonable that the share price fell 66%. Fingers crossed this is the low ebb for the stock. We don't generally like to own companies with falling revenues and no profits, so we're pretty cautious of this one, at the moment.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
Take a more thorough look at Blue Apron Holdings's financial health with this free report on its balance sheet.
A Different Perspective
Given that the market gained 12% in the last year, Blue Apron Holdings shareholders might be miffed that they lost 66%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. With the stock down 8.2% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. Before spending more time on Blue Apron Holdings it might be wise to click here to see if insiders have been buying or selling shares.
We will like Blue Apron Holdings 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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