Even the best stock pickers will make plenty of bad investments. And unfortunately for Allego N.V. (NYSE:ALLG) shareholders, the stock is a lot lower today than it was a year ago. To wit the share price is down 62% in that time. Allego may have better days ahead, of course; we've only looked at a one year period. The share price has dropped 67% in three months.
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.
Given that Allego 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Allego grew its revenue by 95% over the last year. That's a strong result which is better than most other loss making companies. Meanwhile, the share price slid 62%. Typically a growth stock like this will be volatile, with some shareholders concerned about the red ink on the bottom line (that is, the losses). Generally speaking investors would consider a stock like this less risky once it turns a profit. But when do you think that will happen?
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
This free interactive report on Allego's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Allego shareholders are down 62% for the year, even worse than the market loss of 12%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. Notably, the loss over the last year isn't as bad as the 67% drop in the last three months. So it seems like some holders have been dumping the stock of late - and that's not bullish. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 3 warning signs for Allego you should be aware of, and 2 of them shouldn't be ignored.
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 US 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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