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Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. But if you buy individual stocks, you can do both better or worse than that. Unfortunately the Yojee Limited (ASX:YOJ) share price slid 39% over twelve months. That contrasts poorly with the market decline of 4.5%. Notably, shareholders had a tough run over the longer term, too, with a drop of 36% in the last three years. In the last ninety days we've seen the share price slide 43%.
With the stock having lost 17% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.
Check out our latest analysis for Yojee
Yojee 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last year Yojee saw its revenue grow by 98%. That's a strong result which is better than most other loss making companies. Given the revenue growth, the share price drop of 39% seems quite harsh. Our sympathies to shareholders who are now underwater. Prima facie, revenue growth like that should be a good thing, so it's worth checking whether losses have stabilized. Our monkey brains haven't evolved to think exponentially, so humans do tend to underestimate companies that have exponential growth.
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 Yojee's financial health with this free report on its balance sheet.
A Different Perspective
Yojee shareholders are down 39% for the year, but the market itself is up 4.5%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 1.5% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Yojee better, we need to consider many other factors. For example, we've discovered 4 warning signs for Yojee that you should be aware of before investing here.