The 24% return this week takes AudioEye's (NASDAQ:AEYE) shareholders one-year gains to 349%

While stock picking isn't easy, for those willing to persist and learn, it is possible to buy shares in great companies, and generate wonderful returns. When you buy and hold the right company, the returns can make a huge difference to both you and your family. For example, the AudioEye, Inc. (NASDAQ:AEYE) share price rocketed moonwards 349% in just one year. Also pleasing for shareholders was the 132% gain in the last three months. It is also impressive that the stock is up 32% over three years, adding to the sense that it is a real winner.

Since it's been a strong week for AudioEye shareholders, let's have a look at trend of the longer term fundamentals.

See our latest analysis for AudioEye

Given that AudioEye 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 desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last year AudioEye saw its revenue grow by 2.8%. That's not a very high growth rate considering it doesn't make profits. So the 349% gain in just twelve months is completely unexpected. It's great to see that some have made big profits, but we aren't so sure that the increase is justified. This is an example of the huge profits some lucky shareholders occasionally make on growth stocks.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. This free report showing analyst forecasts should help you form a view on AudioEye

A Different Perspective

It's nice to see that AudioEye shareholders have received a total shareholder return of 349% over the last year. That gain is better than the annual TSR over five years, which is 24%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand AudioEye better, we need to consider many other factors. For example, we've discovered 4 warning signs for AudioEye (1 can't be ignored!) that you should be aware of before investing here.

AudioEye is not the only stock insiders are buying. So take a peek at this free list of small cap companies at attractive valuations which insiders have been buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com