Dawson Geophysical Company (NASDAQ:DWSN) shareholders might be concerned after seeing the share price drop 15% in the last month. But that doesn't detract from the splendid returns of the last year. Indeed, the share price is up an impressive 146% in that time. So we think most shareholders won't be too upset about the recent fall. More important, going forward, is how the business itself is going.
Dawson Geophysical isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last year Dawson Geophysical saw its revenue shrink by 41%. So we would not have expected the share price to rise 146%. It just goes to show the market doesn't always pay attention to the reported numbers. It's quite likely the revenue fall was already priced in, anyway.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
This free interactive report on Dawson Geophysical's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
We're pleased to report that Dawson Geophysical shareholders have received a total shareholder return of 146% over one year. That certainly beats the loss of about 7% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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. For example, we've discovered 2 warning signs for Dawson Geophysical that you should be aware of before investing here.
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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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