Aussie Broadband (ASX:ABB) lifts 5.3% this week, taking one-year gains to 92%

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But if you pick the right individual stocks, you could make more than that. To wit, the Aussie Broadband Limited (ASX:ABB) share price is 92% higher than it was a year ago, much better than the market return of around 6.1% (not including dividends) in the same period. That's a solid performance by our standards! Note that businesses generally develop over the long term, so the returns over the last year might not reflect a long term trend.

The past week has proven to be lucrative for Aussie Broadband investors, so let's see if fundamentals drove the company's one-year performance.

Check out our latest analysis for Aussie Broadband

We don't think that Aussie Broadband's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

Over the last twelve months, Aussie Broadband's revenue grew by 60%. That's stonking growth even when compared to other loss-making stocks. While the share price gain of 92% over twelve months is pretty tasty, you might argue it doesn't fully reflect the strong revenue growth. If that's the case, now might be the time to take a close look at Aussie Broadband. Since we evolved from monkeys, we think in linear terms by nature. So if growth goes exponential, opportunity may exist for the enlightened.

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

earnings-and-revenue-growth

We know that Aussie Broadband has improved its bottom line lately, but what does the future have in store? This free report showing analyst forecasts should help you form a view on Aussie Broadband

A Different Perspective

Aussie Broadband shareholders should be happy with the total gain of 92% over the last twelve months. And the share price momentum remains respectable, with a gain of 26% in the last three months. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. It's always interesting to track share price performance over the longer term. But to understand Aussie Broadband better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Aussie Broadband (of which 1 can't be ignored!) you should know about.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU 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.