Investing in stocks comes with the risk that the share price will fall. And unfortunately for Arbe Robotics Ltd. (NASDAQ:ARBE) shareholders, the stock is a lot lower today than it was a year ago. The share price has slid 68% in that time. Because Arbe Robotics hasn't been listed for many years, the market is still learning about how the business performs. Shareholders have had an even rougher run lately, with the share price down 55% in the last 90 days. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.

Since Arbe Robotics has shed US$54m 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 Arbe Robotics

Arbe Robotics 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 fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last twelve months, Arbe Robotics increased its revenue by 102%. That's well above most other pre-profit companies. Meanwhile, the share price slid 68%. This could mean hype has come out of the stock because the bottom line is concerning investors. We'd definitely consider it a positive if the company is trending towards profitability. If you can see that happening, then perhaps consider adding this stock to your watchlist.

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

Take a more thorough look at Arbe Robotics' financial health with this free report on its balance sheet.

A Different Perspective

We doubt Arbe Robotics shareholders are happy with the loss of 68% over twelve months. That falls short of the market, which lost 16%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. The share price decline has continued throughout the most recent three months, down 55%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. 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 risks, for instance. Every company has them, and we've spotted 1 warning sign for Arbe Robotics 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.