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The Datasea (NASDAQ:DTSS) Share Price Is Up 276% And Shareholders Are Boasting About It

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Simply Wall St
·3 min read
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Unfortunately, investing is risky - companies can and do go bankrupt. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Datasea Inc. (NASDAQ:DTSS) share price had more than doubled in just one year - up 276%. Also pleasing for shareholders was the 55% gain in the last three months. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report. We'll need to follow Datasea for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

Check out our latest analysis for Datasea

Because Datasea 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. 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.

Over the last twelve months, Datasea's revenue grew by 404%. That's well above most other pre-profit companies. Meanwhile, the market has paid attention, sending the share price soaring 276% in response. That sort of revenue growth is bound to attract attention, even if the company doesn't turn a profit. The strong share price rise indicates optimism, so there may be a better opportunity for buyers as the hype fades a bit.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

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

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. It might be well worthwhile taking a look at our free report on Datasea's earnings, revenue and cash flow.

A Different Perspective

Datasea boasts a total shareholder return of 276% for the last year. A substantial portion of that gain has come in the last three months, with the stock up 55% in that time. This suggests the company is continuing to win over new investors. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 5 warning signs with Datasea (at least 2 which are potentially serious) , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.