Did Business Growth Power Magna Gold's (CVE:MGR) Share Price Gain of 200%?

When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Magna Gold Corp. (CVE:MGR) share price has soared 200% in the last year. Most would be very happy with that, especially in just one year! Magna Gold hasn't been listed for long, so it's still not clear if it is a long term winner.

See our latest analysis for Magna Gold

Magna Gold isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

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

This free interactive report on Magna Gold's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that Magna Gold shareholders have gained 200% over the last year. The more recent returns haven't been as impressive as the longer term returns, coming in at just 2.0%. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). It's always interesting to track share price performance over the longer term. But to understand Magna Gold better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Magna Gold (including 1 which makes us a bit uncomfortable) .

Of course Magna Gold 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 CA 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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