Strong week for Meta Materials shareholders doesn't alleviate pain of one-year loss

It is doubtless a positive to see that the Meta Materials Inc. $Meta Materials(MMAT.US)$ share price has gained some 155% in the last three months. But in truth the last year hasn't been good for the share price. In fact the stock is down 40% in the last year, well below the market return.

The recent uptick of 7.9% could be a positive sign of things to come, so let's take a look at historical fundamentals.

Meta Materials 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. Shareholders of unprofitable companies usually expect strong 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.

In the last year Meta Materials saw its revenue grow by 434%. That's a strong result which is better than most other loss making companies. Given the revenue growth, the share price drop of 40% seems quite harsh. Our sympathies to shareholders who are now underwater. On the bright side, if this company is moving profits in the right direction, top-line growth like that could be an opportunity. Our monkey brains haven't evolved to think exponentially, so humans do tend to underestimate companies that have exponential growth.