Does Patriot One Technologies's (TSE:PAT) Share Price Gain of 26% Match Its Business Performance?

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It hasn't been the best quarter for Patriot One Technologies Inc. (TSE:PAT) 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 26%.

View our latest analysis for Patriot One Technologies

Patriot One Technologies hasn't yet reported any revenue yet, so it's as much a business idea as an actual business. As a result, we think it's unlikely shareholders are paying much attention to current revenue, but rather speculating on growth in the years to come. It seems likely some shareholders believe that Patriot One Technologies will significantly advance the business plan before too long.

We think companies that have neither significant revenues nor profits are pretty high risk. There is usually a significant chance that they will need more money for business development, putting them at the mercy of capital markets. So the share price itself impacts the value of the shares (as it determines the cost of capital). While some such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt.

When it last reported its balance sheet in April 2019, Patriot One Technologies could boast a strong position, with cash in excess of all liabilities of CA$61m. That allows management to focus on growing the business, and not worry too much about raising capital. And with the share price up 26% in the last year, the market is focussed on that blue sky potential. The image below shows how Patriot One Technologies's balance sheet has changed over time; if you want to see the precise values, simply click on the image.

It can be extremely risky to invest in a company that doesn't even have revenue. There's no way to know its value easily. However you can take a look at whether insiders have been buying up shares. If they are buying a significant amount of shares, that's certainly a good thing. Luckily we are in a position to provide you with this free chart of insider buying (and selling).

A Different Perspective

It's nice to see that Patriot One Technologies shareholders have gained 26% over the last year. We regret to report that the share price is down 11% 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. Before spending more time on Patriot One Technologies it might be wise to click here to see if insiders have been buying or selling shares.

But note: Patriot One Technologies may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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

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.

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. Thank you for reading.