Shareholders in indie Semiconductor (NASDAQ:INDI) have lost 37%, as stock drops 8.5% this past week

Stock Analysis

For many investors, the main point of stock picking is to generate higher returns than the overall market. But the risk of stock picking is that you will likely buy under-performing companies. We regret to report that long term indie Semiconductor, Inc. (NASDAQ:INDI) shareholders have had that experience, with the share price dropping 37% in three years, versus a market return of about 24%. And over the last year the share price fell 21%, so we doubt many shareholders are delighted. The falls have accelerated recently, with the share price down 33% in the last three months. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

View our latest analysis for indie Semiconductor

indie Semiconductor isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last three years, indie Semiconductor saw its revenue grow by 71% per year, compound. That is faster than most pre-profit companies. The share price drop of 11% per year over three years would be considered disappointing by many, so you might argue the company is getting little credit for its impressive revenue growth. It seems likely that actual growth fell short of shareholders' expectations. Still, with high hopes now tempered, now might prove to be an opportunity to buy.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

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

The last twelve months weren't great for indie Semiconductor shares, which cost holders 21%, while the market was up about 7.9%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. The three-year loss of 11% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. 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. It's always interesting to track share price performance over the longer term. But to understand indie Semiconductor better, we need to consider many other factors. For example, we've discovered 2 warning signs for indie Semiconductor that you should be aware of before investing here.

But note: indie Semiconductor 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 American exchanges.

What are the risks and opportunities for indie Semiconductor?

NasdaqCM:INDI

indie Semiconductor

indie Semiconductor, Inc. provides automotive semiconductors and software solutions for advanced driver assistance systems, autonomous vehicle, in-cabin, connected car, and electrification applications in the United States, South America, rest of North America, Greater China, rest of Asia Pacific, and Europe.Show more

Rewards

Earnings are forecast to grow 92.22% per year

Risks

Shareholders have been diluted in the past year

Significant insider selling over the past 3 months

Share Price

Market Cap

1Y Return

Further research onindie Semiconductor

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.

indie Semiconductor, Inc. provides automotive semiconductors and software solutions for advanced driver assistance systems, autonomous vehicle, in-cabin, connected car, and electrification applications in the United States, South America, rest of North America, Greater China, rest of Asia Pacific, and Europe.

High growth potential with adequate balance sheet.