Did Seafire’s (STO:SEAF) Share Price Deserve to Gain 54%?

It hasn’t been the best quarter for Seafire AB (publ) (STO:SEAF) shareholders, since the share price has fallen 11% in that time. But that doesn’t change the reality that over twelve months the stock has done really well. Looking at the full year, the company has easily bested an index fund by gaining 54%.

See our latest analysis for Seafire

Because Seafire is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. 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.

Over the last twelve months, Seafire’s revenue grew by 350%. That’s a head and shoulders above most loss-making companies. While the share price gain of 54% 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 Seafire. 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 revenue has changed over time in the image below.

OM:SEAF Income Statement, November 26th 2019
OM:SEAF Income Statement, November 26th 2019

If you are thinking of buying or selling Seafire stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It’s nice to see that Seafire shareholders have gained 54% over the last year. Unfortunately the share price is down 11% over the last quarter. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. Before spending more time on Seafire it might be wise to click here to see if insiders have been buying or selling shares.

We will like Seafire better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.