Beachbody Company (NYSE:BODY) plunges 11% this week as rising losses may not inspire confidence in its investors
It’s no secret that every investor will make bad investments from time to time. But it’s not unreasonable to try to avoid truly shocking capital losses. So spare a thought for the long-term shareholders of Beachbody, Inc. (NYSE:BODY); the share price has fallen 82% in the last twelve months. That would be enough to make even the strongest stomachs turn. We wouldn’t rush to pass judgment on Beachbody Company because we don’t have a long-term track record to review. Shareholders have had an even tougher race lately, with the share price falling 31% in the past 90 days. While a drop like that is definitely a blow, money isn’t as important as health and happiness.
With the stock down 11% in the past week, it’s worth taking a look at the trade performance and seeing if there are any red flags.
Our analysis indicates that BODY is potentially overrated!
Beachbody Company has not been profitable for the past twelve months, we are unlikely to see a strong correlation between its stock price and earnings per share (EPS). Income is arguably our second best option. Generally speaking, companies without profits should increase their revenue every year, and at a good pace. Some companies are willing to defer profitability to increase revenue faster, but in this case, good revenue growth is expected.
In just one year, Beachbody Company saw its revenue drop 13%. It looks pretty dark, at a glance. The market obviously agreed, as the stock price fell 82%. Holders must not lose the lesson: loss-making companies must increase their income. But the markets are overreacting, so there is an opportunity for investors who are willing to take the time to dig deeper and understand the business.
You can see how earnings and income have changed over time below (find out the exact values by clicking on the image).
We appreciate the fact that insiders have been buying stocks over the past twelve months. Even so, future earnings will be far more important to whether current shareholders are making money. If you are considering buying or selling Beachbody Company stock, you should check out this free report showing analyst earnings forecast.
A different perspective
We doubt Beachbody Company shareholders are happy with the 82% year-over-year loss. This is below the market, which lost 24%. It’s disappointing, but it’s worth bearing in mind that selling market-wide wouldn’t have helped. The share price decline has continued over the past three months, down 31%, suggesting a lack of enthusiasm from investors. Given the relatively short history of this stock, we would remain fairly cautious until we see strong trading performance. I find it very interesting to look at stock price over the long term as a proxy for company performance. But to really get insight, we also need to consider other information. To this end, you should be aware of the 3 warning signs we spotted with Beachbody Company.
If you like buying stocks alongside management then you might love this free list of companies. (Hint: insiders bought them).
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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Find out if Beachbody Company is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.
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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.