The main point of investing for the long term is to make money. Furthermore, you’d generally like to see the share price rise faster than the market But Asure Software, Inc. (NASDAQ:ASUR) has fallen short of that second goal, with a share price rise of 53% over five years, which is below the market return. However, more recent buyers should be happy with the increase of 47% over the last year.
Because Asure Software made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn’t make profits, we’d generally expect to see good 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.
For the last half decade, Asure Software can boast revenue growth at a rate of 32% per year. That’s well above most pre-profit companies. While long-term shareholders have made money, the 8.8% per year gain over five years fall short of the market return. That’s surprising given the strong revenue growth. Arguably this falls in a potential sweet spot – modest share price gains but good top line growth over the long term justifies investigation, in our book.
The company’s revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
We’re pleased to report that Asure Software shareholders have received a total shareholder return of 47% over one year. That gain is better than the annual TSR over five years, which is 8.8%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 2 warning signs we’ve spotted with Asure Software .
We will like Asure Software 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 US exchanges.
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