When you buy shares in a company, there is always a risk that the price drops to zero. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the Nesco Holdings, Inc. (NYSE:NSCO) share price has soared 152% in the last year. Most would be very happy with that, especially in just one year! Also pleasing for shareholders was the 91% gain in the last three months. Nesco Holdings hasn't been listed for long, so it's still not clear if it is a long term winner.
Given that Nesco Holdings 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. Shareholders of unprofitable companies usually expect strong revenue growth. 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 twelve months, Nesco Holdings' revenue grew by 16%. That's a fairly respectable growth rate. While that revenue growth is pretty good the share price performance outshone it, with a lift of 152% as mentioned above. Given that the business has made good progress on the top line, it would be worth taking a look at its path to profitability. But investors need to be wary of how the 'fear of missing out' could influence them to buy without doing thorough research.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. If you are thinking of buying or selling Nesco Holdings stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
Nesco Holdings shareholders should be happy with the total gain of 152% over the last twelve months. A substantial portion of that gain has come in the last three months, with the stock up 91% in that time. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. It's always interesting to track share price performance over the longer term. But to understand Nesco Holdings better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Nesco Holdings (including 1 which makes us a bit uncomfortable) .
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 US 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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