Lulu's Fashion Lounge Holdings (NASDAQ:LVLU shareholders incur further losses as stock declines 11% this week, taking one-year losses to 70%

Even the best investor on earth makes unsuccessful investments. But it should be a priority to avoid stomach churning catastrophes, wherever possible. So we hope that those who held Lulu's Fashion Lounge Holdings, Inc. (NASDAQ:LVLU) during the last year don't lose the lesson, in addition to the 70% hit to the value of their shares. That'd be a striking reminder about the importance of diversification. Lulu's Fashion Lounge Holdings hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. The falls have accelerated recently, with the share price down 41% in the last three months. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.

Since Lulu's Fashion Lounge Holdings has shed US$19m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

See our latest analysis for Lulu's Fashion Lounge Holdings

Lulu's Fashion Lounge Holdings 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last year Lulu's Fashion Lounge Holdings saw its revenue grow by 34%. That's definitely a respectable growth rate. Unfortunately, the market wanted something better, given it sent the share price 70% lower during the year. It could be that the losses are too much for investors to handle without losing their nerve. We'd posit that the future looks challenging, given the disconnect between revenue growth and the share price.

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

earnings-and-revenue-growth
earnings-and-revenue-growth

This free interactive report on Lulu's Fashion Lounge Holdings' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Lulu's Fashion Lounge Holdings shareholders are down 70% for the year, even worse than the market loss of 19%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. The share price decline has continued throughout the most recent three months, down 41%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Lulu's Fashion Lounge Holdings is showing 1 warning sign in our investment analysis , you should know about...

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 US 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.

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