It's nice to see the Domo, Inc. (NASDAQ:DOMO) share price up 16% in a week. But that's not enough to compensate for the decline over the last twelve months. Specifically, the stock price slipped by 68% in that time. Some might say the recent bounce is to be expected after such a bad drop. Arguably, the fall was overdone.

On a more encouraging note the company has added US$68m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.

Check out our latest analysis for Domo

Because Domo made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Domo grew its revenue by 22% over the last year. We think that is pretty nice growth. Meanwhile, the share price tanked 68%, suggesting the market had much higher expectations. It may well be that the business remains approximately on track, but its revenue growth has simply been delayed. For us it's important to consider when you think a company will become profitable, if you're basing your valuation on revenue.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

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

A Different Perspective

The last twelve months weren't great for Domo shares, which performed worse than the market, costing holders 68%. Meanwhile, the broader market slid about 8.1%, likely weighing on the stock. Shareholders have lost 12% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. Although Baron Rothschild famously said to "buy when there's blood in the streets, even if the blood is your own", he also focusses on high quality stocks with solid prospects. 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. Take risks, for example - Domo has 5 warning signs (and 1 which is potentially serious) we think 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.