Yahoo Finance Did Business Growth Power Emyria's (ASX:EMD) Share Price Gain of 257%?
Unless you borrow money to invest, the potential losses are limited. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Emyria Limited (ASX:EMD) share price had more than doubled in just one year - up 257%. On top of that, the share price is up 79% in about a quarter. Note that businesses generally develop over the long term, so the returns over the last year might not reflect a long term trend.
Check out our latest analysis for Emyria
Emyria wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. 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.
Emyria grew its revenue by 218% last year. That's well above most other pre-profit companies. And the share price has responded, gaining 257% as we previously mentioned. It's great to see strong revenue growth, but the question is whether it can be sustained. The strong share price rise indicates optimism, so there may be a better opportunity for buyers as the hype fades a bit.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
Take a more thorough look at Emyria's financial health with this free report on its balance sheet.
A Different Perspective
Emyria boasts a total shareholder return of 257% for the last year. A substantial portion of that gain has come in the last three months, with the stock up 79% in that time. This suggests the company is continuing to win over new investors. 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. Case in point: We've spotted 4 warning signs for Emyria you should be aware of.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.
This article by Simply Wall St is general in nature. 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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