It’s nice to see the Airtasker Limited (ASX:ART) share price up 11% in a week. But that doesn’t change the fact that the returns over the last year have been less than pleasing. After all, the share price is down 44% in the last year, significantly under-performing the market.
While the stock has risen 11% in the past week but long term shareholders are still in the red, let’s see what the fundamentals can tell us.
View our latest analysis for Airtasker
SWOT Analysis for Airtasker
- Shareholders have been diluted in the past year.
- Forecast to reduce losses next year.
- Trading below our estimate of fair value by more than 20%.
- Has less than 3 years of cash runway based on current free cash flow.
- Not expected to become profitable over the next 3 years.
Airtasker 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Airtasker grew its revenue by 41% over the last year. That’s definitely a respectable growth rate. Unfortunately that wasn’t good enough to stop the share price dropping 44%. This implies the market was expecting better growth. However, that’s in the past now, and it’s the future that matters most.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
While Airtasker shareholders are down 44% for the year, the market itself is up 3.6%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 13% over the last three months, the market doesn’t seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we’d remain pretty wary until we see some strong business performance. It’s always interesting to track share price performance over the longer term. But to understand Airtasker better, we need to consider many other factors. Even so, be aware that Airtasker is showing 3 warning signs in our investment analysis , you should know about…
There are plenty of other companies that have insiders buying up shares. You probably do 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 Australian exchanges.
Valuation is complex, but we’re helping make it simple.
Find out whether Airtasker is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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.