The Corero Network Security (LON:CNS) Share Price Has Gained 178%, So Why Not Pay It Some Attention?

It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero. But in contrast you can make much more than 100% if the company does well. To wit, the Corero Network Security plc (LON:CNS) share price has flown 178% in the last three years. Most would be happy with that. On top of that, the share price is up 68% in about a quarter.

View our latest analysis for Corero Network Security

Corero Network Security 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over the last three years Corero Network Security has grown its revenue at 8.4% annually. That's a very respectable growth rate. It's fair to say that the market has acknowledged the growth by pushing the share price up 41% per year. The business has made good progress on the top line, but the market is extrapolating the growth. It would be worth thinking about when profits will flow, since that milestone will attract more attention.

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 Corero Network Security's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Corero Network Security has rewarded shareholders with a total shareholder return of 178% in the last twelve months. Notably the five-year annualised TSR loss of 5% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - Corero Network Security has 1 warning sign we think you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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