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Investors in Lion Group Holding (NASDAQ:LGHL) from a year ago are still down 68%, even after 60% gain this past week

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Lion Group Holding Ltd. (NASDAQ:LGHL) shareholders will doubtless be very grateful to see the share price up 60% in the last week. But that doesn't change the fact that the returns over the last year have been disappointing. Specifically, the stock price slipped by 68% in that time. It's not that amazing to see a bounce after a drop like that. You could argue that the sell-off was too severe.

On a more encouraging note the company has added US$20m 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.

See our latest analysis for Lion Group Holding

Lion Group Holding 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 it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Lion Group Holding's revenue didn't grow at all in the last year. In fact, it fell 61%. If you think that's a particularly bad result, you're statistically on the money It's no surprise, then, that investors dumped the stock like it was garbage, sending the share price down 68%. Buying shares in companies that lose money, shrink revenue, and see share price declines is unpopular with investors, but popular with speculators (apparently). So we'll be looking for strong improvements on the numbers before getting excited.

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

This free interactive report on Lion Group Holding's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Given that the market gained 1.4% in the last year, Lion Group Holding 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. The share price decline has continued throughout the most recent three months, down 21%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Lion Group Holding (at least 2 which are potentially serious) , and understanding them should be part of your investment process.

If you are like me, then you will 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.

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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