Yahoo Finance Imagine Owning Bragg Gaming Group (CVE:BRAG) And Wondering If The 45% Share Price Slide Is Justified
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. For example, the Bragg Gaming Group Inc. (CVE:BRAG) share price is down 45% in the last year. That's well bellow the market return of 0.7%. Because Bragg Gaming Group hasn't been listed for many years, the market is still learning about how the business performs. The good news is that the stock is up 3.8% in the last week.
See our latest analysis for Bragg Gaming Group
Bragg Gaming Group isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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.
Bragg Gaming Group grew its revenue by 75% over the last year. That's well above most other pre-profit companies. Given the revenue growth, the share price drop of 45% seems quite harsh. Our sympathies to shareholders who are now underwater. Prima facie, revenue growth like that should be a good thing, so it's worth checking whether losses have stabilized. 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 company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Take a more thorough look at Bragg Gaming Group's financial health with this free report on its balance sheet.
A Different Perspective
Given that the market gained 0.7% in the last year, Bragg Gaming Group shareholders might be miffed that they lost 45%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 5.7% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. You could get a better understanding of Bragg Gaming Group's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
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 CA exchanges.
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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. Thank you for reading.
