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Those Who Purchased Sosandar (LON:SOS) Shares A Year Ago Have A 17% Loss To Show For It

While it may not be enough for some shareholders, we think it is good to see the Sosandar Plc (LON:SOS) share price up 27% in a single quarter. But in truth the last year hasn't been good for the share price. In fact the stock is down 17% in the last year, well below the market return.

View our latest analysis for Sosandar

Because Sosandar 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

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In the last year Sosandar saw its revenue grow by 91%. That's well above most other pre-profit companies. The share price drop of 17% over twelve months would be considered disappointing by many, so you might argue the company is getting little credit for its impressive revenue growth. On the bright side, if this company is moving profits in the right direction, top-line growth like that could be an opportunity. Our brains have evolved to think in linear fashion, so there's value in learning to recognize exponential growth. We are, in some ways, simply the wisest of the monkeys.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

AIM:SOS Income Statement, January 22nd 2020
AIM:SOS Income Statement, January 22nd 2020

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

Given that the market gained 18% in the last year, Sosandar shareholders might be miffed that they lost 17%. 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. Putting aside the last twelve months, it's good to see the share price has rebounded by 27%, in the last ninety days. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. It's always interesting to track share price performance over the longer term. But to understand Sosandar better, we need to consider many other factors. For instance, we've identified 4 warning signs for Sosandar (1 shouldn't be ignored) that 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 GB exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.