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Unless you borrow money to invest, the potential losses are limited. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Credible Labs Inc. (ASX:CRD) share price has soared 151% in the last year. Most would be very happy with that, especially in just one year! On top of that, the share price is up 103% in about a quarter. We’ll need to follow Credible Labs for a while to get a better sense of its share price trend, since it hasn’t been listed for particularly long.
Because Credible Labs is loss-making, 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Credible Labs grew its revenue by 34% last year. That’s a fairly respectable growth rate. The revenue growth is decent but the share price had an even better year, gaining 151%. If the profitability is on the horizon then now could be a very exciting time to be a shareholder. But investors need to be wary of how the ‘fear of missing out’ could influence them to buy without doing thorough research.
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
Credible Labs shareholders should be happy with the total gain of 151% over the last twelve months. And the share price momentum remains respectable, with a gain of 103% in the last three months. This suggests the company is continuing to win over new investors. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
We will like Credible Labs 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 AU 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 firstname.lastname@example.org. 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.