facebookWould you buy a company that is making a loss but has a growing revenue? A company that provides telehealth which is the likely future of medicine. Any thoughts? - Seedly

Anonymous

08 Jun 2021

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General Investing

Would you buy a company that is making a loss but has a growing revenue? A company that provides telehealth which is the likely future of medicine. Any thoughts?

Discussion (3)

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Chan Ze Ming

25 Jun 2020

Accountancy and Finance Student at Nanyang Polytechnic

Hello,

Why do i feel like i have read an article similar to what you are desribing hahah.

Anyways, if a company is making losses while having a growing revenue, I think you should look into why are they still having losses, is it because the company have a growing cost of sales as well (Revenue up, COGS up = Growing revenue but still loss)? Moreover, you have to ask yourself whether the business is able to scale/expand/at least reduce COGS, whether the cash flow for the business is good, whether the technical analysis is good (Is this price a good deal?) and defintely, whether do you understand the business.

I am pretty sure that there are more qualified professionals than me, but i hope i helped you hahahah.

If you haven't already, you should do your fundamental analysis of the company before pondering about its potential in the future. "The Neatest Little Guide to Stock Market Investing" by Jason Kelly is a beginner-friendly book that will get you started.

There are many instances of companies that were deemed to be the "likely future" of something. E.g. WeWork, the many dot-com companies in the 1990s, etc. Always take calculated risk by doing the groundwork first.

Malvin Tan WP

25 Jun 2020

Writer at t.me/pwpfpodcast

Although promising, no matter how much potential I would buy only if the price is right...

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