Did You Miss Envirosuite's (ASX:EVS) Impressive 143% Share Price Gain?

It hasn't been the best quarter for Envirosuite Limited (ASX:EVS) shareholders, since the share price has fallen 22% in that time. But in three years the returns have been great. In fact, the share price is up a full 143% compared to three years ago. It's not uncommon to see a share price retrace a bit, after a big gain. Only time will tell if there is still too much optimism currently reflected in the share price.

View our latest analysis for Envirosuite

Envirosuite 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 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.

In the last 3 years Envirosuite saw its revenue grow at 82% per year. That's well above most pre-profit companies. Meanwhile, the share price performance has been pretty solid at 34% compound over three years. But it does seem like the market is paying attention to strong revenue growth. That's not to say we think the share price is too high. In fact, it might be worth keeping an eye on this one.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. If you are thinking of buying or selling Envirosuite stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

Envirosuite shareholders are down 27% for the year, but the market itself is up 2.7%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 0.6% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Envirosuite better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Envirosuite (of which 1 shouldn't be ignored!) you should know about.

Envirosuite is not the only stock insiders are buying. So take a peek at this free list of growing companies with 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.

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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. 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.
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