Did Business Growth Power Alta Equipment Group's (NYSE:ALTG) Share Price Gain of 210%?
When you buy shares in a company, there is always a risk that the price drops to zero. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Alta Equipment Group Inc. (NYSE:ALTG) share price has soared 210% in the last year. Most would be very happy with that, especially in just one year! It's also good to see the share price up 33% over the last quarter. This could be related to the recent financial results, released recently - you can catch up on the most recent data by reading our company report. Note that businesses generally develop over the long term, so the returns over the last year might not reflect a long term trend.
View our latest analysis for Alta Equipment Group
Alta Equipment Group 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. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over the last twelve months, Alta Equipment Group's revenue grew by 56%. That's a head and shoulders above most loss-making companies. And the share price has responded, gaining 210% as we previously mentioned. It's great to see strong revenue growth, but the question is whether it can be sustained. Given the positive sentiment around the stock we're cautious, but there's no doubt its worth watching.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
We consider it positive that insiders have made significant purchases in the last year. 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 Alta Equipment Group
A Different Perspective
Alta Equipment Group shareholders should be happy with the total gain of 210% over the last twelve months. The more recent returns haven't been as impressive as the longer term returns, coming in at just 33%. 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). 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. To that end, you should be aware of the 2 warning signs we've spotted with Alta Equipment Group .
Alta Equipment Group is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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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