Mister Spex SE (FRA:MRX) shareholders should be happy to see the share price up 27% in the last month. But that doesn't change the fact that the returns over the last year have been stomach churning. Specifically, the stock price nose-dived 83% in that time. It's not uncommon to see a bounce after a drop like that. The bigger issue is whether the company can sustain the momentum in the long term. We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.
Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns.
See our latest analysis for Mister Spex
Because Mister Spex 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. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last twelve months, Mister Spex increased its revenue by 10%. That's not a very high growth rate considering it doesn't make profits. Even so you could argue that it's surprising that the share price has tanked 83%. Clearly the market was expecting better, and this may blow out projections of profitability. If and only if this company is still likely to succeed, just a little slower, this could be a good opportunity.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
If you are thinking of buying or selling Mister Spex stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
We doubt Mister Spex shareholders are happy with the loss of 83% over twelve months. That falls short of the market, which lost 23%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. With the stock down 34% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand Mister Spex better, we need to consider many other factors. Even so, be aware that Mister Spex is showing 2 warning signs in our investment analysis , you should know about...
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