Yahoo Finance Investors Who Bought eve Sleep (LON:EVE) Shares A Year Ago Are Now Down 89%
It's not a secret that every investor will make bad investments, from time to time. But serious investors should think long and hard about avoiding extreme losses. We wouldn't blame eve Sleep Plc (LON:EVE) shareholders if they were still in shock after the stock dropped like a lead balloon, down 89% in just one year. A loss like this is a stark reminder that portfolio diversification is important. Because eve Sleep hasn't been listed for many years, the market is still learning about how the business performs. The falls have accelerated recently, with the share price down 61% in the last three months. However, one could argue that the price has been influenced by the general market, which is down 32% in the same timeframe.
We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.
See our latest analysis for eve Sleep
eve Sleep 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.
eve Sleep's revenue didn't grow at all in the last year. In fact, it fell 17%. That's not what investors generally want to see. The share price fall of 89% in a year tells the story. That's a stern reminder that profitless companies need to grow the top line, at the very least. Of course, extreme share price falls can be an opportunity for those who are willing to really dig deeper to understand a high risk company like this.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
We doubt eve Sleep shareholders are happy with the loss of 89% over twelve months. That falls short of the market, which lost 23%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. With the stock down 61% 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. 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. Take risks, for example - eve Sleep has 6 warning signs (and 3 which are a bit unpleasant) we think you should know about.
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.
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