Investors in Real Good Food Company (NASDAQ:RGF) sadly lost 37% in the past year

Passive investing in an index fund is a good way to ensure that your own returns roughly match the broader market. But if you buy individual stocks, you can do better or worse than that. Unfortunately the Real Good Food, Inc. (NASDAQ:RGF) the stock price fell 37% year-over-year. This is well below the market’s 20% decline. Real Good Food Company hasn’t been listed for a long time, so while we’re wary of poorly performing recent listings, it can still prove its worth over time.

Given that shareholders are down longer term, let’s take a look at the underlying fundamentals over this period and see if they have been consistent with returns.

Check out our latest analysis for Real Good Food Company

Since Real Good Food Company has not made a profit in the past twelve months, we will focus on revenue growth to get a quick overview of its business development. Shareholders of unprofitable companies generally expect strong revenue growth. Indeed, rapid revenue growth can be easily extrapolated to predict profits, often of considerable size.

Real Good Food Company increased revenue by 107% over the past year. This is a solid result that is better than most other loss-making companies. Considering the revenue growth, the 37% drop in share price looks pretty severe. Our sympathies to the shareholders who are now under water. At first glance, such revenue growth should be a good thing, so it’s worth checking to see if losses have leveled off. Our brains have evolved to think linearly, so it helps to learn to recognize exponential growth. We are, in some ways, simply the wisest of apes.

You can see how earnings and income have changed over time below (find out the exact values ​​by clicking on the image).

earnings-and-revenue-growth

We appreciate the fact that insiders have been buying stocks over the past twelve months. That said, most people consider profit and revenue growth trends to be a more meaningful guide to the business. You can see what analysts are predicting for Real Good Food Company in this interactive graph of future profit estimates.

A different perspective

We doubt Real Good Food Company shareholders are happy with the 37% year-over-year loss. This is below the market, which lost 20%. It’s no doubt a disappointment, but the stock may well have done better in a stronger market. With the stock down 9.9% over the past three months, the market doesn’t seem to believe the company has solved all of its problems. Basically, most investors should be wary of buying poorly performing stocks unless the company itself has clearly improved. While it’s worth considering the various impacts that market conditions can have on the stock price, there are other, even more important factors. Example: we have identified 1 warning sign for Real Good Food Company you should be aware.

Real Good Food Company isn’t the only stock insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider buying, might be just the ticket.

Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on US exchanges.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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