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Anaplan (NYSE:PLAN) pulls back 7.8% this week, but still delivers shareholders notable 14% CAGR over 3 years

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Some Anaplan, Inc. (NYSE:PLAN) shareholders are probably rather concerned to see the share price fall 39% over the last three months. On the other hand the share price is higher than it was three years ago. However, it's unlikely many shareholders are elated with the share price gain of 47% over that time, given the rising market.

In light of the stock dropping 7.8% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive three-year return.

See our latest analysis for Anaplan

Because Anaplan made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Anaplan's revenue trended up 29% each year over three years. That's much better than most loss-making companies. The stock is up 14% over that time - a decent but not impressive return. Generally, we'd expect a stronger share price, given the impressive revenue growth. If the business can trend towards profitability and fund its growth, then the market could present an opportunity. But you might want to take a closer look at this one.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
earnings-and-revenue-growth

Anaplan is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

Over the last year, Anaplan shareholders took a loss of 41%. In contrast the market gained about 20%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Fortunately the longer term story is brighter, with total returns averaging about 14% per year over three years. The recent sell-off could be an opportunity if the business remains sound, so it may be worth checking the fundamental data for signs of a long-term growth trend. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Anaplan (of which 1 can't be ignored!) 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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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.