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Unfortunately, investing is risky – businesses can and do go bankrupt. But if you choose the right stock, you can save a lot Following that 100%. For example, the Datalex plc (ISE: DLE) the stock price has climbed 118% in a single year. Last week, the share price rose 13%. Sadly, long-term returns aren’t that good, with the stock falling 60% in the past three years.
The past week has turned out to be lucrative for Datalex investors, so let’s see if fundamentals have driven the company’s year-over-year performance.
See our latest analysis for Datalex
Datalex is currently unprofitable, so most analysts would look to revenue growth to get a sense of how fast the underlying business is growing. When a business is not making a profit, we generally expect good revenue growth. Indeed, the rapid growth in income can be easily extrapolated to the expected profits, often of considerable size.
Last year, Datalex saw its turnover decrease by 23%. So we wouldn’t have expected the stock price to rise 118%. It just shows that the market doesn’t always pay attention to the reported numbers. Chances are, the drop in income has already been built in, anyway.
The graph below illustrates the evolution of earnings and income over time (reveal the exact values ​​by clicking on the image).
If you are thinking of buying or selling Datalex shares, you should check this out FREE detailed report on its balance sheet.
A different perspective
It is nice to see that Datalex shareholders have received a total shareholder return of 118% over the past year. There is no doubt that these recent returns are much better than the TSR’s loss of 12% per annum over five years. The long-term loss makes us cautious, but the short-term TSR gain certainly points to a brighter future. I find it very interesting to look at the long-term share price as an indicator of company performance. But to really get an overview, we have to take other information into account as well. Consider, for example, the ever-present specter of investment risk. We have identified 3 warning signs with Datalex (at least 2 that make us uncomfortable), and understanding them should be part of your investment process.
For those who like to find winning investments this free list of growing companies with recent insider buys, might be just the ticket.
Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks that currently trade on the IE exchanges.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in the mentioned stocks.
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