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The simplest way to benefit from a rising market is to buy an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. That downside risk was realized by Payoneer Global Inc. (NASDAQ:PAYO) shareholders over the last year, as the share price declined 33%. That contrasts poorly with the market return of 21%. We wouldn't rush to judgement on Payoneer Global because we don't have a long term history to look at. Furthermore, it's down 27% in about a quarter. That's not much fun for holders.
On a more encouraging note the company has added US$115m 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.
Because Payoneer Global made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. 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.
In the last year Payoneer Global saw its revenue grow by 27%. That's definitely a respectable growth rate. Unfortunately that wasn't good enough to stop the share price dropping 33%. You might even wonder if the share price was previously over-hyped. However, that's in the past now, and it's the future that matters most.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
If you are thinking of buying or selling Payoneer Global stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
While Payoneer Global shareholders are down 33% for the year, the market itself is up 21%. 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 27%, suggesting an absence of enthusiasm from investors. 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 Payoneer Global better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Payoneer Global you should know about.
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 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.