Stock Analysis

Can You Imagine How Elated IZEA Worldwide's (NASDAQ:IZEA) Shareholders Feel About Its 511% Share Price Gain?

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NasdaqCM:IZEA
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For many, the main point of investing in the stock market is to achieve spectacular returns. When an investor finds a multi-bagger (a stock that goes up over 200%), it makes a big difference to their portfolio. For example, the IZEA Worldwide, Inc. (NASDAQ:IZEA) share price rocketed moonwards 511% in just one year. And in the last month, the share price has gained 43%. In contrast, the longer term returns are negative, since the share price is 62% lower than it was three years ago.

We love happy stories like this one. The company should be really proud of that performance!

View our latest analysis for IZEA Worldwide

Given that IZEA Worldwide 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

IZEA Worldwide actually shrunk its revenue over the last year, with a reduction of 8.6%. This is in stark contrast to the splendorous stock price, which has rocketed 511% since this time a year ago. There can be no doubt this kind of decoupling of revenue growth and share price growth is unusual to see in loss making companies. To us, a gain like this looks like speculation, but there might be historical trends to back it up.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
NasdaqCM:IZEA Earnings and Revenue Growth December 22nd 2020

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

It's good to see that IZEA Worldwide has rewarded shareholders with a total shareholder return of 511% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 12% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. 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. For instance, we've identified 4 warning signs for IZEA Worldwide that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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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