Is 5G Networks’s (ASX:5GN) 107% Share Price Increase Well Justified?

It might be of some concern to shareholders to see the 5G Networks Limited (ASX:5GN) share price down 25% in the last month. But that doesn’t detract from the splendid returns of the last year. We’re very pleased to report the share price shot up 107% in that time. So it may be that the share price is simply cooling off after a strong rise. Investors should be wondering whether the business itself has the fundamental value required to continue to drive gains.

Check out our latest analysis for 5G Networks

Given that 5G Networks didn’t make a profit in the last twelve months, we’ll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

ASX:5GN Income Statement, July 26th 2019
ASX:5GN Income Statement, July 26th 2019

If you are thinking of buying or selling 5G Networks stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It’s nice to see that 5G Networks shareholders have gained 107% over the last year. The more recent returns haven’t been as impressive as the longer term returns, coming in at just 4.0%. Having said that, we doubt shareholders would be concerned. It seems the market is simply waiting on more information, because if the business delivers so will the share price (eventually). If you would like to research 5G Networks in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.

Of course 5G Networks may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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 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.