Volatility 101: Should Vault Intelligence (ASX:VLT) Shares Have Dropped 32%?

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Investors can approximate the average market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Investors in Vault Intelligence Limited (ASX:VLT) have tasted that bitter downside in the last year, as the share price dropped 32%. That's disappointing when you consider the market returned 5.6%. We wouldn't rush to judgement on Vault Intelligence because we don't have a long term history to look at. There was little comfort for shareholders in the last week as the price declined a further 2.9%.

Check out our latest analysis for Vault Intelligence

Given that Vault Intelligence 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. 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 Vault Intelligence saw its revenue grow by 15%. We think that is pretty nice growth. Meanwhile, the share price is down 32% over twelve months, which is disappointing given the progress made. This implies the market was expecting better growth. However, that's in the past now, and it's the future that matters most.

Depicted in the graphic below, you'll see revenue and earnings over time. If you want more detail, you can click on the chart itself.

ASX:VLT Income Statement, May 15th 2019
ASX:VLT Income Statement, May 15th 2019

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

While Vault Intelligence shareholders are down 32% for the year, the market itself is up 5.6%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Putting aside the last twelve months, it's good to see the share price has rebounded by 6.3%, in the last ninety days. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). Before spending more time on Vault Intelligence it might be wise to click here to see if insiders have been buying or selling shares.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU 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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