It’s nice to see the Virgin Orbit Holdings, Inc. (NASDAQ: VORB) share price up 17% in one week. But that’s no great consolation for those who suffered from last year’s declines. Meanwhile, the stock price sank like a stone, falling 51%. The rally in the stock price is not so impressive considering the fall. Doubtless the fall has been exaggerated.
The recent 17% rise could be a positive sign of things to come, so let’s take a lot of look at historical fundamentals.
Given that Virgin Orbit Holdings has posted a loss over the past twelve months, we think the market is likely more focused on revenue and revenue growth, at least for now. Generally speaking, companies without profits should increase their revenue every year, and at a good pace. Indeed, it is difficult to be sure that a business will be sustainable if revenue growth is negligible and it never makes a profit.
Virgin Orbit Holdings’ revenue did not increase at all last year. In fact, it dropped 54%. It looks like a sinking result for investors around the world. It’s no surprise, then, that investors threw the stock away like it was trash, sending the stock price down 51%. Buying shares in loss-making companies with declining revenues is often called speculation, not investment. So we’ll be looking for strong improvements on the numbers before we get excited.
You can see how revenue and earnings have changed over time in the image below (click on the graph to see the exact values).
This free interactive report on Virgin Orbit Holdings balance sheet strength is a great place to start, if you want to investigate the stock further.
A different perspective
Virgin Orbit Holdings shareholders are down 51% for the year, worse than the 10% market loss. It’s disappointing, but it’s worth bearing in mind that selling market-wide wouldn’t have helped. The share price decline has continued over the past three months, down 33%, suggesting a lack of enthusiasm from investors. Given the relatively short history of this stock, we would remain fairly cautious until we see strong trading performance. It is always interesting to follow the evolution of the share price over the long term. But to better understand Virgin Orbit Holdings, we need to consider many other factors. Example: we have identified 4 warning signs for Virgin Orbit Holdings you should be aware, and one of them is concerning.
Sure Virgin Orbit Holdings may not be the best stock to buy. So you might want to see this free collection of growth values.
Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on US exchanges.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.