Can You Imagine How Jubilant Directa Plus' (LON:DCTA) Shareholders Feel About Its 159% Share Price Gain?

It's been a soft week for Directa Plus Plc (LON:DCTA) shares, which are down 11%. But in three years the returns have been great. In three years the stock price has launched 159% higher: a great result. So the recent fall in the share price should be viewed in that context. Only time will tell if there is still too much optimism currently reflected in the share price.

View our latest analysis for Directa Plus

Given that Directa Plus 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Directa Plus' revenue trended up 53% each year over three years. That's much better than most loss-making companies. Meanwhile, the share price performance has been pretty solid at 37% compound over three years. This suggests the market has recognized the progress the business has made, at least to a significant degree. Nonetheless, we'd say Directa Plus is still worth investigating - successful businesses can often keep growing for long periods.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

If you are thinking of buying or selling Directa Plus stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's nice to see that Directa Plus shareholders have gained 58% (in total) over the last year. That gain actually surpasses the 37% TSR it generated (per year) over three years. These improved returns may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Directa Plus better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Directa Plus , and understanding them should be part of your investment process.

But note: Directa Plus may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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