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Even the best stock pickers will make plenty of bad investments. Anyone who held Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV) over the last year knows what a loser feels like. In that relatively short period, the share price has plunged 61%. Because Hall of Fame Resort & Entertainment hasn't been listed for many years, the market is still learning about how the business performs. The falls have accelerated recently, with the share price down 26% in the last three months.
View our latest analysis for Hall of Fame Resort & Entertainment
Hall of Fame Resort & Entertainment wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. 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.
In just one year Hall of Fame Resort & Entertainment saw its revenue fall by 8.9%. That's not what investors generally want to see. In the absence of profits, it's not unreasonable that the share price fell 61%. 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.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. If you are thinking of buying or selling Hall of Fame Resort & Entertainment stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
While Hall of Fame Resort & Entertainment shareholders are down 61% for the year, the market itself is up 44%. 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 26% 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. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Hall of Fame Resort & Entertainment you should know about.