The 3.9% return this week takes Mimecast's (NASDAQ:MIME) shareholders five-year gains to 250%
The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Mimecast Limited (NASDAQ:MIME) share price has soared 250% in the last half decade. Most would be very happy with that. Also pleasing for shareholders was the 28% gain in the last three months.
Since the stock has added US$178m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.
Check out our latest analysis for Mimecast
We don't think that Mimecast's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.
For the last half decade, Mimecast can boast revenue growth at a rate of 24% per year. That's well above most pre-profit companies. So it's not entirely surprising that the share price reflected this performance by increasing at a rate of 28% per year, in that time. This suggests the market has well and truly recognized the progress the business has made. Mimecast seems like a high growth stock - so growth investors might want to add it to their watchlist.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
Mimecast is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for Mimecast in this interactive graph of future profit estimates.
A Different Perspective
It's good to see that Mimecast has rewarded shareholders with a total shareholder return of 71% in the last twelve months. That's better than the annualised return of 28% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Mimecast better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Mimecast .
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.
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 (at) simplywallst.com.
