Yahoo Finance Even after rising 5.0% this past week, Hippo Holdings (NYSE:HIPO) shareholders are still down 81% over the past year
It's not a secret that every investor will make bad investments, from time to time. But it's not unreasonable to try to avoid truly shocking capital losses. So we hope that those who held Hippo Holdings Inc. (NYSE:HIPO) during the last year don't lose the lesson, in addition to the 81% hit to the value of their shares. A loss like this is a stark reminder that portfolio diversification is important. Hippo Holdings may have better days ahead, of course; we've only looked at a one year period. Furthermore, it's down 12% in about a quarter. That's not much fun for holders. However, one could argue that the price has been influenced by the general market, which is down 9.8% in the same timeframe. We really feel for shareholders in this scenario. It's a good reminder of the importance of diversification, and it's worth keeping in mind there's more to life than money, anyway.
While the stock has risen 5.0% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.
See our latest analysis for Hippo Holdings
Hippo Holdings isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last year Hippo Holdings saw its revenue grow by 77%. That's a strong result which is better than most other loss making companies. So on the face of it we're really surprised to see the share price down 81% over twelve months. Something weird is definitely impacting the stock price; we'd venture the company has destroyed value somehow. We'd recommend taking a very close look at the stock (and any available forecasts), before considering a purchase, because the share price is not correlated with the revenue growth, that's for sure. Of course, investors do over-react when they are stressed out, so the sell-off could be unjustifiably severe.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. You can see what analysts are predicting for Hippo Holdings in this interactive graph of future profit estimates.
A Different Perspective
Hippo Holdings shareholders are down 81% for the year, even worse than the market loss of 6.9%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. With the stock down 12% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand Hippo Holdings better, we need to consider many other factors. Even so, be aware that Hippo Holdings is showing 1 warning sign in our investment analysis , you should know about...
Hippo Holdings is not the only stock that insiders are buying. 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 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.
