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Investing in stocks comes with the risk that the share price will fall. Unfortunately, shareholders of Similarweb Ltd. (NYSE:SMWB) have suffered share price declines over the last year. In that relatively short period, the share price has plunged 61%. Similarweb hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. But it's up 9.7% in the last week.

The recent uptick of 9.7% could be a positive sign of things to come, so let's take a lot at historical fundamentals.

Before we look at the performance, you might like to know that our analysis indicates that SMWB is potentially overvalued!

Because Similarweb made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Similarweb grew its revenue by 48% over the last year. That's a strong result which is better than most other loss making companies. Meanwhile, the share price slid 61%. This could mean hype has come out of the stock because the bottom line is concerning investors. Generally speaking investors would consider a stock like this less risky once it turns a profit. But when do you think that will happen?

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

We doubt Similarweb shareholders are happy with the loss of 61% over twelve months. That falls short of the market, which lost 14%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. The share price decline has continued throughout the most recent three months, down 8.6%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 2 warning signs we've spotted with Similarweb .

We will like Similarweb better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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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Similarweb (NYSE:SMWB) shareholders are up 9.7% this past week, but still in the red over the last year - Simply Wall St