Investing in stocks comes with the risk that the share price will fall. Anyone who held Payoneer Global Inc. (NASDAQ:PAYO) over the last year knows what a loser feels like. To wit the share price is down 56% in that time. Because Payoneer Global hasn't been listed for many years, the market is still learning about how the business performs. Even worse, it's down 16% in about a month, which isn't fun at all. We do note, however, that the broader market is down 6.4% in that period, and this may have weighed on the share price.
On a more encouraging note the company has added US$131m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.
Given that Payoneer Global 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Payoneer Global grew its revenue by 40% over the last year. We think that is pretty nice growth. Unfortunately it seems investors wanted more, because the share price is down 56% in that time. It is of course possible that the business will still deliver strong growth, it will just take longer than expected to do it. For us it's important to consider when you think a company will become profitable, if you're basing your valuation on revenue.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
This free interactive report on Payoneer Global's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Payoneer Global shareholders are down 56% for the year, even worse than the market loss of 17%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 2.4% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. It's always interesting to track share price performance over the longer term. But to understand Payoneer Global better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Payoneer Global you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
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.
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