While not a mind-blowing move, it is good to see that the indie Semiconductor, Inc. (NASDAQ:INDI) share price has gained 21% in the last three months. The stock is actually down over the last year. But on the bright side, its return of 37%, is better than the market, which is down 0.44028896593814.
Since indie Semiconductor has shed US$93m from its value in the past 7 days, let’s see if the longer term decline has been driven by the business’ economics.
Check out the opportunities and risks within the US Semiconductor industry.
Because indie Semiconductor 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last year indie Semiconductor saw its revenue grow by 150%. That’s well above most other pre-profit companies. While the share price is down 37% in the last year, not too bad given the weak market. The relative resilience of the share price might reflect the strong revenue growth. For us, this sort of situation smells of opportunity – the share price is down but the revenue is up. Either way, we’d say the mismatch between the revenue growth and the share price justifies a closer look.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
We’re pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It’s always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
indie Semiconductor shareholders may not have made money over the last year, but their total loss of 37% isn’t as bad as the market loss of around 37%. The loss over the last year is steeper than the loss of 9% per year over three years. Whilst Baron Rothschild does say to “buy when there’s blood in the streets, even if the blood is your own”, buyers would need to examine the data carefully to be comfortable that the business itself is sound. It’s always interesting to track share price performance over the longer term. But to understand indie Semiconductor better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We’ve identified 1 warning sign with indie Semiconductor , and understanding them should be part of your investment process.
But note: indie Semiconductor may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
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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Read More: Shareholders in indie Semiconductor (NASDAQ:INDI) have lost 37%, as stock drops 9.9% this