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Vivint Smart Home (NYSE:VVNT) adds US$649m to market cap in the past 7 days, though investors from a year ago are still down 40%

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This month, we saw the Vivint Smart Home, Inc. (NYSE:VVNT) up an impressive 46%. But that doesn’t change the reality of under-performance over the last twelve months. In fact the stock is down 40% in the last year, well below the market return.

Although the past week has been more reassuring for shareholders, they’re still in the red over the last year, so let’s see if the underlying business has been responsible for the decline.

Check out our latest analysis for Vivint Smart Home

Vivint Smart Home 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. 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 twelve months, Vivint Smart Home increased its revenue by 15%. That’s definitely a respectable growth rate. Meanwhile, the share price is down 40% over twelve months, which is disappointing given the progress made. This implies the market was expecting better growth. But if revenue keeps growing, then at a certain point the share price would likely follow.

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

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

A Different Perspective

Given that the market gained 31% in the last year, Vivint Smart Home shareholders might be miffed that they lost 40%. While the aim is to do better than that, it’s worth recalling that even great long-term investments sometimes underperform for a year or more. Putting aside the last twelve months, it’s good to see the share price has rebounded by 18%, in the last ninety days. This could just be a bounce because the selling was too aggressive, but fingers crossed it’s the start of a new trend. 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. For example, we’ve discovered 4 warning signs for Vivint Smart Home (1 is concerning!) that you should be aware of before investing here.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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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