The NEXT Biometrics Group (OB:NEXT) Share Price Is Up 100% And Shareholders Are Holding On

Passive investing in index funds can generate returns that roughly match the overall market. But investors can boost returns by picking market-beating companies to own shares in. For example, the NEXT Biometrics Group ASA (OB:NEXT) share price is up 100% in the last year, clearly besting the market return of around 4.6% (not including dividends). If it can keep that out-performance up over the long term, investors will do very well! Unfortunately the longer term returns are not so good, with the stock falling 84% in the last three years.

See our latest analysis for NEXT Biometrics Group

NEXT Biometrics Group wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect 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.

In the last year NEXT Biometrics Group saw its revenue shrink by 44%. Despite the lack of revenue growth, the stock has returned a solid 100% the last twelve months. To us that means that there isn't a lot of correlation between the past revenue performance and the share price, but a closer look at analyst forecasts and the bottom line may well explain a lot.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

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

A Different Perspective

It's nice to see that NEXT Biometrics Group shareholders have received a total shareholder return of 100% over the last year. Notably the five-year annualised TSR loss of 14% 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. It's always interesting to track share price performance over the longer term. But to understand NEXT Biometrics Group better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 5 warning signs for NEXT Biometrics Group (of which 3 can't be ignored!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on NO 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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