Yahoo Finance Increasing losses over year doesn't faze investors as stock swells 17% this past week
It's nice to see the Virgin Orbit Holdings, Inc. (NASDAQ:VORB) share price up 17% in a week. But that isn't much consolation to those who have suffered through the declines of the last year. During that time the share price has sank like a stone, descending 51%. The share price recovery is not so impressive when you consider the fall. Arguably, the fall was overdone.
The recent uptick of 17% could be a positive sign of things to come, so let's take a lot at historical fundamentals.
See our latest analysis for Virgin Orbit Holdings
Because Virgin Orbit Holdings made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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.
Virgin Orbit Holdings' revenue didn't grow at all in the last year. In fact, it fell 54%. That looks like a train-wreck result to investors far and wide. It's no surprise, then, that investors dumped the stock like it was garbage, sending the share price down 51%. Buying shares in loss making companies with falling revenue is often called speculation, not investing. So we'll be looking for strong improvements on the numbers before getting excited.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
This free interactive report on Virgin Orbit Holdings' balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Virgin Orbit Holdings shareholders are down 51% for the year, even worse than the market loss of 10%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. The share price decline has continued throughout the most recent three months, down 33%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand Virgin Orbit Holdings better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Virgin Orbit Holdings you should be aware of, and 1 of them is concerning.
Of course Virgin Orbit Holdings may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
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.
