In This Article:
Solo Brands, Inc. (NYSE:DTC) shareholders should be happy to see the share price up 11% in the last month. But that isn't much consolation for the painful drop we've seen in the last year. To wit, the stock has dropped 72% over the last year. Arguably, the recent bounce is to be expected after such a bad drop. The real question is whether the company can turn around its fortunes.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
Check out our latest analysis for Solo Brands
Given that Solo Brands 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last twelve months, Solo Brands increased its revenue by 69%. That's a strong result which is better than most other loss making companies. So on the face of it we're really surprised to see the share price down 72% over twelve months. There's clearly something unusual going on here such as an acquisition that hasn't delivered expected profits. We'd recommend taking a very close look at the stock (and any available forecasts), before considering a purchase, because the share price is not correlated with the revenue growth, that's for sure. Of course, investors do over-react when they are stressed out, so the sell-off could be unjustifiably severe.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
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. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
We doubt Solo Brands shareholders are happy with the loss of 72% over twelve months. That falls short of the market, which lost 14%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. It's great to see a nice little 10% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares - and the price they paid.