Stock Analysis

Upland Software's (NASDAQ:UPLD) Wonderful 575% Share Price Increase Shows How Capitalism Can Build Wealth

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NasdaqGM:UPLD
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Long term investing can be life changing when you buy and hold the truly great businesses. And we've seen some truly amazing gains over the years. Don't believe it? Then look at the Upland Software, Inc. (NASDAQ:UPLD) share price. It's 575% higher than it was five years ago. And this is just one example of the epic gains achieved by some long term investors. And in the last month, the share price has gained 3.3%. But this could be related to good market conditions -- stocks in its market are up 4.8% in the last month.

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

See our latest analysis for Upland Software

Given that Upland Software 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. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

For the last half decade, Upland Software can boast revenue growth at a rate of 32% per year. Even measured against other revenue-focussed companies, that's a good result. Fortunately, the market has not missed this, and has pushed the share price up by 47% per year in that time. Despite the strong run, top performers like Upland Software have been known to go on winning for decades. So we'd recommend you take a closer look at this one, but keep in mind the market seems optimistic.

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
NasdaqGM:UPLD Earnings and Revenue Growth January 13th 2021

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

Upland Software shareholders gained a total return of 15% during the year. But that was short of the market average. On the bright side, the longer term returns (running at about 47% a year, over half a decade) look better. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. 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. Case in point: We've spotted 2 warning signs for Upland Software you should be aware of.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

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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What are the risks and opportunities for Upland Software?

Upland Software, Inc. provides cloud-based enterprise work management software in the United States, the United Kingdom, Canada, and internationally.

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Rewards

  • Trading at 33.8% below our estimate of its fair value

Risks

  • Shareholders have been diluted in the past year

  • Currently unprofitable and not forecast to become profitable over the next 3 years

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1Y Return

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