While some are satisfied with an index fund, active investors aim to find truly magnificent investments on the stock market. When you buy and hold the right company, the returns can make a huge difference to both you and your family. For example, the IZEA Worldwide, Inc. (NASDAQ:IZEA) share price is up a whopping 683% in the last year, a handsome return in a single year. In more good news, the share price has risen 74% in thirty days. Unfortunately the longer term returns are not so good, with the stock falling 57% in the last three years.
It really delights us to see such great share price performance for investors.
IZEA Worldwide isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
IZEA Worldwide actually shrunk its revenue over the last year, with a reduction of 8.6%. This is in stark contrast to the splendorous stock price, which has rocketed 683% since this time a year ago. It's pretty clear the market isn't basing its valuation on fundamental metrics like revenue. To us, a gain like this looks like speculation, but there might be historical trends to back it up.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
This free interactive report on IZEA Worldwide's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
We're pleased to report that IZEA Worldwide shareholders have received a total shareholder return of 683% over one year. There's no doubt those recent returns are much better than the TSR loss of 12% per year over five years. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand IZEA Worldwide better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 4 warning signs for IZEA Worldwide you should know about.
Of course IZEA Worldwide may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
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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