Yahoo Finance The past year for loanDepot (NYSE:LDI) investors has not been profitable
It's easy to match the overall market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Unfortunately the loanDepot, Inc. (NYSE:LDI) share price slid 33% over twelve months. That's well below the market return of 6.9%. loanDepot may have better days ahead, of course; we've only looked at a one year period. Shareholders have had an even rougher run lately, with the share price down 15% in the last 90 days. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.
So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.
View our latest analysis for loanDepot
loanDepot wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
loanDepot's revenue didn't grow at all in the last year. In fact, it fell 73%. That looks like a train-wreck result to investors far and wide. Meanwhile, the share price dropped by 33%. We would want to see improvements in the core business, and diminishing losses, before getting too excited about this one.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free report showing analyst forecasts should help you form a view on loanDepot
A Different Perspective
Given that the market gained 6.9% in the last year, loanDepot shareholders might be miffed that they lost 33%. 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. With the stock down 15% 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. It's always interesting to track share price performance over the longer term. But to understand loanDepot better, we need to consider many other factors. Take risks, for example - loanDepot has 3 warning signs we think you should be aware of.
loanDepot is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American 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.
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