Bubs Australia's (ASX:BUB) Stock Price Has Reduced 38% In The Past Year
Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Investors in Bubs Australia Limited (ASX:BUB) have tasted that bitter downside in the last year, as the share price dropped 38%. That's well below the market decline of 2.1%. However, the longer term returns haven't been so bad, with the stock down 9.9% in the last three years. Furthermore, it's down 28% in about a quarter. That's not much fun for holders.
See our latest analysis for Bubs Australia
Because Bubs Australia 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Bubs Australia grew its revenue by 24% over the last year. We think that is pretty nice growth. Meanwhile, the share price is down 38% over twelve months, which is disappointing given the progress made. You might even wonder if the share price was previously over-hyped. But if revenue keeps growing, then at a certain point the share price would likely follow.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. If you are thinking of buying or selling Bubs Australia stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
Bubs Australia shareholders are down 38% for the year, falling short of the market return. Meanwhile, the broader market slid about 2.1%, likely weighing on the stock. Shareholders have lost 3.2% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. Although Baron Rothschild famously said to "buy when there's blood in the streets, even if the blood is your own", he also focusses on high quality stocks with solid prospects. It's always interesting to track share price performance over the longer term. But to understand Bubs Australia better, we need to consider many other factors. For example, we've discovered 2 warning signs for Bubs Australia that you should be aware of before investing here.
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.
This article by Simply Wall St is general in nature. 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.
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