Yahoo Finance Shareholders in Ardagh Metal Packaging (NYSE:AMBP) have lost 12%, as stock drops 5.5% this past week
Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Investors in Ardagh Metal Packaging S.A. (NYSE:AMBP) have tasted that bitter downside in the last year, as the share price dropped 12%. That's disappointing when you consider the market returned 20%. Because Ardagh Metal Packaging hasn't been listed for many years, the market is still learning about how the business performs. The share price has dropped 14% in three months.
Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.
See our latest analysis for Ardagh Metal Packaging
Ardagh Metal Packaging isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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.
In the last twelve months, Ardagh Metal Packaging increased its revenue by 13%. That's not a very high growth rate considering it doesn't make profits. Given this lacklustre revenue growth, the share price drop of 12% seems pretty appropriate. It's important not to lose sight of the fact that profitless companies must grow. But if you buy a loss making company then you could become a loss making investor.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
This free interactive report on Ardagh Metal Packaging's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
While Ardagh Metal Packaging shareholders are down 12% for the year, the market itself is up 20%. 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. It's worth noting that the last three months did the real damage, with a 14% decline. This probably signals that the business has recently disappointed shareholders - it will take time to win them back. You could get a better understanding of Ardagh Metal Packaging's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
