When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But when you pick a company that is really flourishing, you can make more than 100%. Long term AudioEye, Inc. (NASDAQ:AEYE) shareholders would be well aware of this, since the stock is up 200% in five years. Also pleasing for shareholders was the 133% gain in the last three months.
AudioEye isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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.
For the last half decade, AudioEye can boast revenue growth at a rate of 60% per year. Even measured against other revenue-focussed companies, that's a good result. Meanwhile, its share price performance certainly reflects the strong growth, given the share price grew at 25% per year, compound, during the period. So it seems likely that buyers have paid attention to the strong revenue growth. To our minds that makes AudioEye worth investigating - it may have its best days ahead.
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 AudioEye's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
It's good to see that AudioEye has rewarded shareholders with a total shareholder return of 33% in the last twelve months. That's better than the annualised return of 25% 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 AudioEye better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for AudioEye you should be aware of.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
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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