https://www.barchart.com/stocks/quo...&sym=RNT.AX&grid=1&height=500&studyheight=100
Speaking of "forward expectations" and what I previously said about how smallcaps which had experienced euphoric price movements can end miserably lower and stay lower, take the case of RENT.COM (RNT). As you can see the attached price chart, this stock came onboard with punters expecting it to be close to the next realestate.com except it covers the rent market which no one did. Novel idea and you would have thought that even if it could do 10pc of what REA did, it should be a no brainer right? Like many other punters, I jumped onboard in late 2015 and was doing well for that short period of time that the stock hit an all time high of close to 60c but sell I did not since the potential was great, but as the 4C came it had nothing to show off but had still better revenues than the Yojees and Sportshero. Although a bit late to cut loss, I did nonetheless when the price turned - today it is trading at just 10pc of its all time high at 6.5c with half yearly revenues of $1m two years later (improved from $450k two years before). Despite the novel idea and seemingly good value proposition, it did not get as much traction in terms of revenues (forget subscribers if they are not turning in cash) - when companies cannot show you revenues they give you other metrics like subscribers, hits, etc creating the impression of progress (seen it before ) and retailers wait till more 4C that show no material revenues and share price continue to slide - that moment of truth is too late.
To avoid another Rent.com, a judgement call is needed much earlier and so when there is a chance to do so , question the revenue model and look at the price movement - typically a downward moving price chart tells you the market does not like it and you shouldn't be a fool thinking you are getting a bargain, because had you done that with Rent.com after its initial large fall you would still be considerably underwater after 2 years plus two capital calls along the way.
