Shareholders in Mogo (TSE:MOGO) have lost 69%, as stock drops 10% this past week
While not a mind-blowing move, it is good to see that the Mogo Inc. (TSE:MOGO) share price has gained 15% in the last three months. But that is small recompense for the exasperating returns over three years. In that time, the share price dropped 69%. Some might say the recent bounce is to be expected after such a bad drop. Perhaps the company has turned over a new leaf.
With the stock having lost 10% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.
View our latest analysis for Mogo
Mogo isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. 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.
Over three years, Mogo grew revenue at 34% per year. That's well above most other pre-profit companies. In contrast, the share price is down 19% compound, over three years - disappointing by most standards. It seems likely that the market is worried about the continual losses. But a share price drop of that magnitude could well signal that the market is overly negative on the stock.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. So it makes a lot of sense to check out what analysts think Mogo will earn in the future (free profit forecasts).
A Different Perspective
Mogo shareholders are down 64% for the year, falling short of the market return. Meanwhile, the broader market slid about 1.8%, likely weighing on the stock. Shareholders have lost 19% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. Although Baron Rothschild famously said to "buy when there's blood in the streets, even if the blood is your own", he also focusses on high quality stocks with solid prospects. It's always interesting to track share price performance over the longer term. But to understand Mogo better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Mogo (including 1 which is potentially serious) .
Mogo 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 CA 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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