The three-year returns have been massive for Zegona Communications (LON:ZEG) shareholders despite underlying losses increasing

We think that it's fair to say that the possibility of finding fantastic multi-year winners is what motivates many investors. You won't get it right every time, but when you do, the returns can be truly splendid. One such superstar is Zegona Communications plc (LON:ZEG), which saw its share price soar 567% in three years. On top of that, the share price is up 89% in about a quarter. Anyone who held for that rewarding ride would probably be keen to talk about it.

Since it's been a strong week for Zegona Communications shareholders, let's have a look at trend of the longer term fundamentals.

View our latest analysis for Zegona Communications

Zegona Communications isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually desire strong 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.

Over the last three years Zegona Communications has grown its revenue at 162% annually. That's well above most pre-profit companies. In light of this attractive revenue growth, it seems somewhat appropriate that the share price has been rocketing, boasting a gain of 88% per year, over the same period. Despite the strong run, top performers like Zegona Communications have been known to go on winning for decades. In fact, it might be time to put it on your watchlist, if you're not already familiar with the stock.

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

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. You can see what analysts are predicting for Zegona Communications in this interactive graph of future profit estimates.

A Different Perspective

It's nice to see that Zegona Communications shareholders have received a total shareholder return of 151% over the last year. That gain is better than the annual TSR over five years, which is 42%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Zegona Communications better, we need to consider many other factors. For example, we've discovered 1 warning sign for Zegona Communications that you should be aware of before investing here.

Zegona Communications is not the only stock insiders are buying. So take a peek at this free list of small cap companies at attractive valuations which insiders have been buying.

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

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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.