Cettire Limited (ASX:CTT) shareholders have seen the share price descend 21% over the month. But that cannot eclipse the spectacular share price rise we've seen over the last twelve months. In that time, shareholders have had the pleasure of a 616% boost to the share price. So it is not that surprising to see the stock retrace a little. While winners often keep winning, it can pay to be cautious after a strong rise. It really delights us to see such great share price performance for investors.
Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.
Cettire isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last year Cettire saw its revenue grow by 304%. That's well above most other pre-profit companies. But the share price has really rocketed in response gaining 616% as previously mentioned. Despite the strong growth, it's certainly possible the market has gotten a little over-excited. So this looks like a great watchlist candidate for investors who look for high growth inflexion points.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. This free report showing analyst forecasts should help you form a view on Cettire
A Different Perspective
It's nice to see that Cettire shareholders have gained 616% over the last year. We regret to report that the share price is down 1.4% over ninety days. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Cettire is showing 1 warning sign in our investment analysis , you should know about...
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
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.