It hasn't been the best quarter for DataWalk S.A. (WSE:DAT) shareholders, since the share price has fallen 28% in that time. But over the last three years the stock has shone bright like a diamond. In fact, the share price has taken off in that time, up 656%. So the recent fall doesn't do much to dampen our respect for the business. Only time will tell if there is still too much optimism currently reflected in the share price. It really delights us to see such great share price performance for investors.
Although DataWalk has shed zł127m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.
Because DataWalk made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Over the last three years DataWalk has grown its revenue at 93% annually. That's much better than most loss-making companies. And it's not just the revenue that is taking off. The share price is up 96% per year in that time. It's always tempting to take profits after a share price gain like that, but high-growth companies like DataWalk can sometimes sustain strong growth for many years. 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).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of DataWalk's earnings, revenue and cash flow.
A Different Perspective
While the broader market gained around 12% in the last year, DataWalk shareholders lost 5.0%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 40% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - DataWalk has 1 warning sign we think you should be aware of.
But note: DataWalk 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 PL 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.