Yahoo Finance Shareholders in Kin and Carta (LON:KCT) are in the red if they invested a year ago
It is doubtless a positive to see that the Kin and Carta plc (LON:KCT) share price has gained some 37% in the last three months. But that's not enough to compensate for the decline over the last twelve months. Specifically, the stock price slipped by 56% in that time. Some might say the recent bounce is to be expected after such a bad drop. Of course, it could be that the fall was overdone.
It's worthwhile assessing if the company's economics have been moving in lockstep with these underwhelming shareholder returns, or if there is some disparity between the two. So let's do just that.
Check out our latest analysis for Kin and Carta
Given that Kin and Carta 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. 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.
Kin and Carta grew its revenue by 26% over the last year. We think that is pretty nice growth. Meanwhile, the share price tanked 56%, suggesting the market had much higher expectations. 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 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 Kin and Carta stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Kin and Carta shareholders are down 56% for the year, but the market itself is up 7.0%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 1.7% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Kin and Carta better, we need to consider many other factors. For instance, we've identified 2 warning signs for Kin and Carta that you should be aware of.
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 British 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.
