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I am totally new to the stock market. I am trying to learn about the implications of a company's fundamentals on its stock price. I have gone through many companies and saw their fundamentals. I came across a company name Alphageo and when I checked its fundamentals and stock price, it's totally different. Company's revenue has increased a lot but the share price has fallen from 800 to 198. I can't get why this is happening

this is the share price graph of past years

this is the P&L statement of company

Debt to equity ratio is just .1. If I could get any help then it would be really appreciable

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Fundamentals don't always explain share price fully. There may be no way to encapsulate all of the reasons for the drop, but here are some possibilities (generally speaking, not specifically for this company)

  • The price ramped up in 2017 due to expected high performance, and it has not lived up to that expectation
  • The industry that the company is in has declined overall
  • Other changes within the company since 2017 have caused future expectations to be lower.

There are always anomalies when looking at individual companies, which is why individual stock picking is very risky. If you are new to investing, my advice is to diversify to reduce risk, which might mean buying index funds with most of your capital, saving a small amount (10-15%) for individual stocks if you want to experiment. That lets you try out theories without completely wiping out your portfolio.

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  • Also, profit is down from last year.
    – RonJohn
    Aug 12, 2019 at 18:07
  • ^ ! Also not up much from the year before that.... What's the P/E ? I assume the stock price fell because they were vastly overpriced, but without knowing all the numbers it's really hard to say (and I'm too lazy to look it up (at work (where I could get fired))).
    – xyious
    Aug 14, 2019 at 15:33
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The short answer is that stock prices and company revenues are not always directly correlated.

Stocks increase in price when buyers overpower sellers and this is generally fueled by positive investor sentiment. Perception is more important than reality. If everyone thinks a stock is going up, they buy. If they think it is going down, they sell (or avoid buying).

Investors tend to assign more weight to future value and companies can remain grossly undervalued for a long time.

It's also important to note that revenue is not the only fundamental factor that should be analyzed. Others include:

  • Company Growth
  • Industry Competition
  • Industry Strength
  • Broader Market Conditions
  • Debt
  • Dividends
  • Trustworthiness (i.e. do people believe reported numbers and trust management?)
  • Dilution (offerings, warrants, etc.)
  • Poor Guidance from Management
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