Stock Analysis

Did You Miss Zedge's (NYSEMKT:ZDGE) Impressive 216% Share Price Gain?

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NYSEAM:ZDGE
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Unfortunately, investing is risky - companies can and do go bankrupt. 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 Zedge, Inc. (NYSEMKT:ZDGE) share price had more than doubled in just one year - up 216%. Shareholders are also celebrating an even better 263% rise, over the last three months. This could be related to the recent financial results, released recently - you can catch up on the most recent data by reading our company report. And shareholders have also done well over the long term, with an increase of 94% in the last three years.

See our latest analysis for Zedge

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the last year Zedge grew its earnings per share, moving from a loss to a profit.

When a company is just on the edge of profitability it can be well worth considering other metrics in order to more precisely gauge growth (and therefore understand share price movements).

However the year on year revenue growth of 32% would help. We do see some companies suppress earnings in order to accelerate revenue growth.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth
AMEX:ZDGE Earnings and Revenue Growth December 15th 2020

We know that Zedge has improved its bottom line lately, but what does the future have in store? So we recommend checking out this free report showing consensus forecasts

A Different Perspective

It's nice to see that Zedge shareholders have gained 216% (in total) over the last year. That's better than the annualized TSR of 25% over the last three years. These improved returns may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Zedge (of which 1 is significant!) you should know about.

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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