BIT Mining (NYSE: BTCM) Down 8.6% This Week, But Still Offers Shareholders Outstanding 201% YoY Return

Shareholders might be concerned that the BIT Mines Limited (NYSE: BTCM) share price down 13% last month. In contrast, over the past twelve months, the stock has generated some pretty impressive returns. During this period, the share price climbed 201%. So some might not be surprised to see the price retrace some. Investors should consider whether the company itself has the fundamental value required to continue to generate earnings.

In light of the stock’s 8.6% drop over the past week, we want to look at the longer-term story and see if fundamentals have been driving the company’s positive performance on a year.

See our latest review for BIT Mining

BIT Mining has not been profitable over the past twelve months, we are unlikely to see a strong correlation between its share price and its earnings per share (EPS). Income is arguably our best option. Generally speaking, companies with no profits are expected to increase their income every year, and at a good rate. Indeed, the rapid growth in income can be easily extrapolated to the expected profits, often of considerable size.

Over the past twelve months, BIT Mining’s turnover has increased by 13,757%. This is way above most other nonprofits. And the stock price reacted, gaining 201% as we mentioned earlier. This type of revenue growth is bound to attract attention even if the business is not making a profit. The sharp rise in stock prices indicates optimism, so there may be a better opportunity for buyers as the hype dies down a bit.

The image below shows how revenue and income have tracked over time (if you click on the image you can see more details).

The strength of the balance sheet is crucial. It might be worth taking a look at our free report on changes in their financial situation over time.

A different perspective

We are pleased to report that the shareholders of BIT Mining received a total shareholder return of 201% over one year. There is no doubt that these recent returns are much better than the TSR’s loss of 8% per annum over five years. It makes us a little suspicious, but the company may have changed course. I find it very interesting to look at the long-term share price as an indicator of company performance. But to really get an overview, we have to take other information into account as well. Like risks, for example. Every business has them, and we’ve spotted 3 warning signs for BIT Mining (2 of which are a bit disturbing!) that you should know about.

If you would rather consult with another company – one with potentially superior finances – then don’t miss this free list of companies that have proven they can increase their profits.

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

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in the mentioned stocks.

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