New weakness as Global Fashion Group (ETR: GFG) falls 32% this week, bringing year-over-year losses to 54%

Investing in stocks carries the risk that the stock price will fall. And there is no doubt that Global Fashion Group SA (ETR: GFG) has had a very bad year. The stock price slipped 54% during this period. We wouldn’t be rushing to pass judgment on Global Fashion Group because we don’t have a long-term story to look at. It’s down 61% in about a quarter.

Since the past week has been a tough one for shareholders, let’s take a look at the fundamentals and see what we can learn.

Discover our latest analysis for Global Fashion Group

Because Global Fashion Group has recorded a loss over the past twelve months, we believe the market is likely more focused on revenue and revenue growth, at least for now. Generally speaking, companies with no profits are expected to increase their income every year, and at a good rate. Some companies are ready to postpone profitability to increase their revenue faster, but in this case, good revenue growth is expected.

Over the past twelve months, Global Fashion Group has increased its turnover by 7.4%. While this might sound decent, it’s not great considering the business is still at a loss. It is likely that this subdued growth has contributed to the stock price declining by 54% over the past year. We would like to see evidence that future income growth will be stronger before we get too interested in it. When a stock drops sharply like this, it can signal an overreaction. Our preference is to wait for fundamental improvements before purchasing, but now might be a good time to do your research.

The image below shows how revenue and income have tracked over time (if you click on the image you can see more details).

XTRA: GFG Earnings and Revenue Growth December 17, 2021

You can see how his track record has strengthened (or weakened) over time in this free interactive graphics.

A different perspective

Given that the market gained 16% last year, shareholders of Global Fashion Group might be sorry they lost 54%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. It should be noted that the last three months have done the real damage, with a drop of 61%. This likely indicates that the company has recently disappointed shareholders – it will take time to win them back. It is always interesting to follow the evolution of stock prices over the long term. But to better understand Global Fashion Group, there are many other factors that we need to consider. For example, we discovered 2 warning signs for Global Fashion Group which you should know before investing here.

For those who like to find winning investments this free list of growing companies with recent insider buys, might be just the ticket.

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

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.

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