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It might be of some concern to shareholders to see the Gannett Co., Inc. (NYSE:GCI) share price down 18% in the last month. But that cannot eclipse the spectacular share price rise we've seen over the last twelve months. Few could complain about the impressive 437% rise, throughout the period. So it is not that surprising to see the stock retrace a little. Only time will tell if there is still too much optimism currently reflected in the share price.
Gannett wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last year Gannett saw its revenue grow by 82%. That's stonking growth even when compared to other loss-making stocks. But the share price has really rocketed in response gaining 437% as previously mentioned. Despite the strong growth, it's certainly possible the market has gotten a little over-excited. But if the share price does moderate a bit, there might be an opportunity for high growth investors.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
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. This free report showing analyst forecasts should help you form a view on Gannett
A Different Perspective
It's good to see that Gannett has rewarded shareholders with a total shareholder return of 437% in the last twelve months. Notably the five-year annualised TSR loss of 9% per year compares very unfavourably with the recent share price performance. This makes us a little wary, but the business might have turned around its fortunes. 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. For example, we've discovered 2 warning signs for Gannett that you should be aware of before investing here.
Gannett is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
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. 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.
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