The 3.2% return this week takes Lions Gate Entertainment's (NYSE:LGF.A) shareholders one-year gains to 42%
If you want to compound wealth in the stock market, you can do so by buying an index fund. But you can significantly boost your returns by picking above-average stocks. For example, the Lions Gate Entertainment Corp. (NYSE:LGF.A) share price is up 42% in the last 1 year, clearly besting the market return of around 19% (not including dividends). So that should have shareholders smiling. Zooming out, the stock is actually down 29% in the last three years.
The past week has proven to be lucrative for Lions Gate Entertainment investors, so let's see if fundamentals drove the company's one-year performance.
See our latest analysis for Lions Gate Entertainment
Given that Lions Gate Entertainment 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 expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last year Lions Gate Entertainment saw its revenue grow by 12%. That's not great considering the company is losing money. The modest growth is probably largely reflected in the share price, which is up 42%. That's not a standout result, but it is solid - much like the level of revenue growth. It could be worth keeping an eye on this one, especially if growth accelerates.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So it makes a lot of sense to check out what analysts think Lions Gate Entertainment will earn in the future (free profit forecasts).
A Different Perspective
It's nice to see that Lions Gate Entertainment shareholders have received a total shareholder return of 42% over the last year. That certainly beats the loss of about 7% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Lions Gate Entertainment better, we need to consider many other factors. Even so, be aware that Lions Gate Entertainment is showing 2 warning signs in our investment analysis , you should know about...
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 American exchanges.
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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.
