Unfortunately, investing is risky - companies can and do go bankrupt. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Cardlytics, Inc. (NASDAQ:CDLX) share price has soared 119% in the last year. Most would be very happy with that, especially in just one year! Also pleasing for shareholders was the 18% gain in the last three months. Note that businesses generally develop over the long term, so the returns over the last year might not reflect a long term trend.
Because Cardlytics is loss-making, 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. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
In the last year Cardlytics saw its revenue grow by 20%. That's a fairly respectable growth rate. While that revenue growth is pretty good the share price performance outshone it, with a lift of 119% as mentioned above. Given that the business has made good progress on the top line, it would be worth taking a look at its path to profitability. But investors need to be wary of how the 'fear of missing out' could influence them to buy without doing thorough research.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
Take a more thorough look at Cardlytics's financial health with this free report on its balance sheet.
A Different Perspective
Cardlytics boasts a total shareholder return of 119% for the last year. The more recent returns haven't been as impressive as the longer term returns, coming in at just 18%. Having said that, we doubt shareholders would be concerned. It seems the market is simply waiting on more information, because if the business delivers so will the share price (eventually). Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.
But note: Cardlytics may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.