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Investors Who Bought Super League Gaming (NASDAQ:SLGG) Shares A Year Ago Are Now Down 68%

While not a mind-blowing move, it is good to see that the Super League Gaming, Inc. (NASDAQ:SLGG) share price has gained 17% in the last three months. But that's small comfort given the dismal price performance over the last year. Specifically, the stock price slipped by 68% in that time. Some might say the recent bounce is to be expected after such a bad drop. You could argue that the sell-off was too severe.

View our latest analysis for Super League Gaming

Super League Gaming 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Super League Gaming grew its revenue by 60% over the last year. That's a strong result which is better than most other loss making companies. In contrast the share price is down 68% over twelve months. Yes, the market can be a fickle mistress. Typically a growth stock like this will be volatile, with some shareholders concerned about the red ink on the bottom line (that is, the losses). We'd definitely consider it a positive if the company is trending towards profitability. If you can see that happening, then perhaps consider adding this stock to your watchlist.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

NasdaqCM:SLGG Income Statement, February 25th 2020
NasdaqCM:SLGG Income Statement, February 25th 2020

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. You can see what analysts are predicting for Super League Gaming in this interactive graph of future profit estimates.

A Different Perspective

Given that the market gained 16% in the last year, Super League Gaming shareholders might be miffed that they lost 68%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. Putting aside the last twelve months, it's good to see the share price has rebounded by 17%, in the last ninety days. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - Super League Gaming has 5 warning signs (and 1 which shouldn't be ignored) we think you should know about.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.