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As an investor, mistakes are inevitable. But really bad investments should be rare. So consider, for a moment, the misfortune of ReWalk Robotics Ltd. (NASDAQ:RWLK) investors who have held the stock for three years as it declined a whopping 98%. That’d be enough to cause even the strongest minds some disquiet. And more recent buyers are having a tough time too, with a drop of 87% in the last year. Furthermore, it’s down 45% in about a quarter. That’s not much fun for holders.
We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don’t have to lose the lesson.
View our latest analysis for ReWalk Robotics
Given that ReWalk Robotics 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. Shareholders of unprofitable companies usually expect strong revenue growth. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last three years, ReWalk Robotics saw its revenue grow by 7.1% per year, compound. Given it’s losing money in pursuit of growth, we are not really impressed with that. But the share price crash at 73% per year does seem a bit harsh! We generally don’t try to ‘catch the falling knife’. Before considering a purchase, take a look at the losses the company is racking up.
The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.
Balance sheet strength is crucual. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
Over the last year, ReWalk Robotics shareholders took a loss of 87%. In contrast the market gained about 1.2%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. The three-year loss of 73% per year isn’t as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. Although Warren Buffett famously said he likes to ‘buy when there is blood on the streets’, he also focusses on high quality stocks with solid prospects. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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