As every investor would know, you don’t hit a homerun every time you swing. But serious investors should think long and hard about avoiding extreme losses. We wouldn’t blame MultiMetaVerse Holdings Limited (NASDAQ:MMV) shareholders if they were still in shock after the stock dropped like a lead balloon, down 74% in just one year. While some investors are willing to stomach this sort of loss, they are usually professionals who spread their bets thinly. MultiMetaVerse Holdings hasn’t been listed for long, so although we’re wary of recent listings that perform poorly, it may still prove itself with time. It’s down 75% in about a quarter.
With that in mind, it’s worth seeing if the company’s underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
MultiMetaVerse Holdings 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. When a company doesn’t make profits, we’d generally expect to see good revenue growth. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
MultiMetaVerse Holdings grew its revenue by 24% over the last year. We think that is pretty nice growth. However, it seems like the market wanted more, since the share price is down 74%. One fear might be that the company might be losing too much money and will need to raise more. It seems that the market has concerns about the future, because that share price action does not seem to reflect the revenue growth at all.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
MultiMetaVerse Holdings shareholders are down 74% for the year, even worse than the market loss of 12%. There’s no doubt that’s a disappointment, but the stock may well have fared better in a stronger market. It’s worth noting that the last three months did the real damage, with a 75% decline. This probably signals that the business has recently disappointed shareholders – it will take time to win them back. 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. For instance, we’ve identified 4 warning signs for MultiMetaVerse Holdings (3 don’t sit too well with us) that you should be aware of.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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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