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ReWalk Robotics Ltd. (NASDAQ:RWLK) shareholders might be concerned after seeing the share price drop 16% in the last month. But that cannot eclipse the spectacular share price rise we've seen over the last twelve months. Few could complain about the impressive 311% rise, throughout the period. So it is not that surprising to see the stock retrace a little. Of course, winners often do keep winning, so there may be more gains to come (if the business fundamentals stack up).
Because ReWalk Robotics 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
ReWalk Robotics actually shrunk its revenue over the last year, with a reduction of 9.7%. So it's very confusing to see that the share price gained a whopping 311%. It's pretty clear the market isn't basing its valuation on fundamental metrics like revenue. While this gain looks like speculative buying to us, sometimes speculation pays off.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
If you are thinking of buying or selling ReWalk Robotics stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
It's nice to see that ReWalk Robotics shareholders have received a total shareholder return of 311% over the last year. That certainly beats the loss of about 15% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with ReWalk Robotics (at least 1 which doesn't sit too well with us) , and understanding them should be part of your investment process.
We will like ReWalk Robotics better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
This article by Simply Wall St is general in nature. 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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