Yahoo Finance Bilibili (NASDAQ:BILI) shareholders have endured a 79% loss from investing in the stock a year ago
It's not a secret that every investor will make bad investments, from time to time. But it should be a priority to avoid stomach churning catastrophes, wherever possible. It must have been painful to be a Bilibili Inc. (NASDAQ:BILI) shareholder over the last year, since the stock price plummeted 79% in that time. A loss like this is a stark reminder that portfolio diversification is important. The silver lining (for longer term investors) is that the stock is still 34% higher than it was three years ago. The falls have accelerated recently, with the share price down 40% in the last three months. 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.
Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.
Check out our latest analysis for Bilibili
Given that Bilibili 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Bilibili grew its revenue by 62% over the last year. That's well above most other pre-profit companies. So on the face of it we're really surprised to see the share price down 79% over twelve months. There's clearly something unusual going on here such as an acquisition that hasn't delivered expected profits. We'd recommend taking a very close look at the stock (and any available forecasts), before considering a purchase, because the share price is not correlated with the revenue growth, that's for sure. Of course, markets do over-react so share price drop may be too harsh.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Bilibili is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. If you are thinking of buying or selling Bilibili stock, you should check out this free report showing analyst consensus estimates for future profits.
A Different Perspective
The last twelve months weren't great for Bilibili shares, which performed worse than the market, costing holders 79%. The market shed around 9.0%, no doubt weighing on the stock price. Fortunately the longer term story is brighter, with total returns averaging about 10% per year over three years. The recent sell-off could be an opportunity if the business remains sound, so it may be worth checking the fundamental data for signs of a long-term growth trend. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Bilibili you should know about.
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.
