Bravura Solutions (ASX:BVS) delivers shareholders strong 128% return over 1 year, surging 11% in the last week alone

Unless you borrow money to invest, the potential losses are limited. But if you pick the right stock, you can make a lot more than 100%. For example, the Bravura Solutions Limited (ASX:BVS) share price has soared 128% in the last 1 year. Most would be very happy with that, especially in just one year! It's even up 11% in the last week. In contrast, the longer term returns are negative, since the share price is 71% lower than it was three years ago.

Since it's been a strong week for Bravura Solutions shareholders, let's have a look at trend of the longer term fundamentals.

See our latest analysis for Bravura Solutions

Bravura Solutions wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally hope to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Bravura Solutions grew its revenue by 2.8% last year. That's not great considering the company is losing money. In contrast, the share price took off during the year, gaining 128%. We're happy that investors have made money, though we wonder if the increase will be sustained. We're not so sure that revenue growth is driving the market optimism about the stock.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free report showing analyst forecasts should help you form a view on Bravura Solutions

A Different Perspective

It's good to see that Bravura Solutions has rewarded shareholders with a total shareholder return of 128% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 10% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.