BlueBet Holdings (ASX:BBT) shareholders have endured a 72% loss from investing in the stock a year ago

As every investor would know, you don't hit a homerun every time you swing. But it's not unreasonable to try to avoid truly shocking capital losses. So spare a thought for the long term shareholders of BlueBet Holdings Ltd (ASX:BBT); the share price is down a whopping 72% in the last twelve months. While some investors are willing to stomach this sort of loss, they are usually professionals who spread their bets thinly. We wouldn't rush to judgement on BlueBet Holdings because we don't have a long term history to look at. The falls have accelerated recently, with the share price down 32% in the last three months. Of course, this share price action may well have been influenced by the 13% decline in the broader market, throughout the period.

So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.

See our latest analysis for BlueBet Holdings

BlueBet Holdings wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last year BlueBet Holdings saw its revenue grow by 65%. That's well above most other pre-profit companies. So the hefty 72% share price crash makes us think the company has somehow offended market participants. Something weird is definitely impacting the stock price; we'd venture the company has destroyed value somehow. What is clear is that the market is not judging the company on its revenue growth right now. Of course, markets do over-react so share price drop may be too harsh.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. You can see what analysts are predicting for BlueBet Holdings in this interactive graph of future profit estimates.

A Different Perspective

BlueBet Holdings shareholders are down 72% for the year, even worse than the market loss of 4.2%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 32% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand BlueBet Holdings better, we need to consider many other factors. For example, we've discovered 2 warning signs for BlueBet Holdings that you should be aware of before investing here.

BlueBet Holdings is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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

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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.