BIT Mining Limited (NYSE:BTCM) shareholders might be concerned after seeing the share price drop 13% in the last month. Despite this, the stock is a strong performer over the last year, no doubt about that. During that period, the share price soared a full 201%. So some might not be surprised to see the price retrace some. Only time will tell if there is still too much optimism currently reflected in the share price.
Although BIT Mining has shed CN¥61m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.
BIT Mining isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
BIT Mining grew its revenue by 13,757% last year. That's well above most other pre-profit companies. Meanwhile, the market has paid attention, sending the share price soaring 201% in response. That sort of revenue growth is bound to attract attention, even if the company doesn't turn a profit. Given the positive sentiment around the stock we're cautious, but there's no doubt its worth watching.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
This free interactive report on BIT Mining's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
It's good to see that BIT Mining has rewarded shareholders with a total shareholder return of 201% in the last twelve months. Notably the five-year annualised TSR loss of 8% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with BIT Mining (at least 2 which don't sit too well with us) , and understanding them should be part of your investment process.
Of course BIT Mining may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.