Taking the occasional loss comes part and parcel with investing on the stock market. And unfortunately for Agrify Corporation (NASDAQ:AGFY) shareholders, the stock is a lot lower today than it was a year ago. In that relatively short period, the share price has plunged 69%. Agrify may have better days ahead, of course; we’ve only looked at a one year period. Furthermore, it’s down 67% in about a quarter. That’s not much fun for holders.
After losing 22% this past week, it’s worth investigating the company’s fundamentals to see what we can infer from past performance.
Agrify 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 it’s hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
In the last twelve months, Agrify increased its revenue by 395%. That’s a strong result which is better than most other loss making companies. Meanwhile, the share price slid 69%. This could mean hype has come out of the stock because the bottom line is concerning investors. Generally speaking investors would consider a stock like this less risky once it turns a profit. But when do you think that will happen?
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
This free interactive report on Agrify’s balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Agrify shareholders are down 69% for the year, even worse than the market loss of 9.8%. There’s no doubt that’s a disappointment, but the stock may well have fared better in a stronger market. The share price decline has continued throughout the most recent three months, down 67%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we’d remain pretty wary until we see some strong business performance. 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. For example, we’ve discovered 3 warning signs for Agrify that you should be aware of before investing here.
Of course Agrify may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.