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Deliveroo (LON:ROO investor one-year losses grow to 69% as the stock sheds UK£193m this past week

The nature of investing is that you win some, and you lose some. Anyone who held Deliveroo plc (LON:ROO) over the last year knows what a loser feels like. The share price has slid 69% in that time. Deliveroo may have better days ahead, of course; we've only looked at a one year period. On top of that, the share price is down 9.8% in the last week.

Since Deliveroo has shed UK£193m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

View our latest analysis for Deliveroo

Given that Deliveroo didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong 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, Deliveroo increased its revenue by 24%. We think that is pretty nice growth. Meanwhile, the share price tanked 69%, suggesting the market had much higher expectations. It may well be that the business remains approximately on track, but its revenue growth has simply been delayed. To our minds it isn't enough to just look at revenue, anyway. Always consider when profits will flow.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

earnings-and-revenue-growth
earnings-and-revenue-growth

We like that insiders have been buying shares in the last twelve months. 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 Deliveroo in this interactive graph of future profit estimates.

A Different Perspective

Deliveroo shareholders are down 69% for the year, even worse than the market loss of 4.1%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. It's great to see a nice little 8.9% rebound in the last three months. 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. For instance, we've identified 2 warning signs for Deliveroo that you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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