This month, we saw the Inplay Oil Corp. (TSE:IPO) up an impressive 36%. But in truth the last year hasn’t been good for the share price. In fact the stock is down 20% in the last year, well below the market return.
Inplay Oil isn’t currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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 year Inplay Oil saw its revenue grow by 22%. That’s definitely a respectable growth rate. Unfortunately that wasn’t good enough to stop the share price dropping 20%. You might even wonder if the share price was previously over-hyped. However, that’s in the past now, and it’s the future that matters most.
The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).
Take a more thorough look at Inplay Oil’s financial health with this free report on its balance sheet.
A Different Perspective
Given that the market gained 7.8% in the last year, Inplay Oil shareholders might be miffed that they lost 20%. While the aim is to do better than that, it’s worth recalling that even great long-term investments sometimes underperform for a year or more. Putting aside the last twelve months, it’s good to see the share price has rebounded by 22%, in the last ninety days. This could just be a bounce because the selling was too aggressive, but fingers crossed it’s the start of a new trend. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.
We will like Inplay Oil 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 CA exchanges.
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