Thinkific Labs Inc. (TSE:THNC) shareholders will doubtless be very grateful to see the share price up 42% in the last month. But that isn't much consolation to those who have suffered through the declines of the last year. Specifically, the stock price slipped by 69% in that time. The share price recovery is not so impressive when you consider the fall. Arguably, the fall was overdone.

On a more encouraging note the company has added CA$30m 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 Thinkific Labs

Thinkific Labs isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last twelve months, Thinkific Labs increased its revenue by 40%. We think that is pretty nice growth. Meanwhile, the share price tanked 69%, 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 how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

If you are thinking of buying or selling Thinkific Labs stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We doubt Thinkific Labs shareholders are happy with the loss of 69% over twelve months. That falls short of the market, which lost 0.6%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. It's great to see a nice little 9.6% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). It's always interesting to track share price performance over the longer term. But to understand Thinkific Labs better, we need to consider many other factors. Even so, be aware that Thinkific Labs is showing 2 warning signs in our investment analysis , you should know about...

But note: Thinkific Labs may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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

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