Enthusiast Gaming Holdings (TSE:EGLX) hikes 16% this week, taking one-year gains to 69%

By
Simply Wall St
Published
November 24, 2021
TSX:EGLX
Source: Shutterstock

The simplest way to invest in stocks is to buy exchange traded funds. But if you pick the right individual stocks, you could make more than that. For example, the Enthusiast Gaming Holdings Inc. (TSE:EGLX) share price is up 69% in the last 1 year, clearly besting the market return of around 25% (not including dividends). If it can keep that out-performance up over the long term, investors will do very well! We'll need to follow Enthusiast Gaming Holdings for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

The past week has proven to be lucrative for Enthusiast Gaming Holdings investors, so let's see if fundamentals drove the company's one-year performance.

Check out our latest analysis for Enthusiast Gaming Holdings

Given that Enthusiast Gaming Holdings 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. 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.

In the last year Enthusiast Gaming Holdings saw its revenue grow by 285%. That's stonking growth even when compared to other loss-making stocks. The solid 69% share price gain goes down pretty well, but it's not necessarily as good as you might expect given the top notch revenue growth. So quite frankly it could be a good time to investigate Enthusiast Gaming Holdings in some detail. Human beings have trouble conceptualizing (and valuing) exponential growth. Is that what we're seeing here?

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

earnings-and-revenue-growth
TSX:EGLX Earnings and Revenue Growth November 24th 2021

It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. If you are thinking of buying or selling Enthusiast Gaming Holdings stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

Enthusiast Gaming Holdings shareholders should be happy with the total gain of 69% over the last twelve months. We regret to report that the share price is down 6.2% over ninety days. Shorter term share price moves often don't signify much about the business itself. It's always interesting to track share price performance over the longer term. But to understand Enthusiast Gaming Holdings better, we need to consider many other factors. For example, we've discovered 3 warning signs for Enthusiast Gaming Holdings that you should be aware of before investing here.

Enthusiast Gaming Holdings 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 CA exchanges.

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.

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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.