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Did Business Growth Power Tinybeans Group's (ASX:TNY) Share Price Gain of 145%?

Simply Wall St
·3 min read

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But in contrast you can make much more than 100% if the company does well. To wit, the Tinybeans Group Limited (ASX:TNY) share price has flown 145% in the last three years. Most would be happy with that. On top of that, the share price is up 28% in about a quarter. But this could be related to the strong market, which is up 13% in the last three months.

See our latest analysis for Tinybeans Group

Tinybeans 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Tinybeans Group's revenue trended up 56% each year over three years. That's well above most pre-profit companies. Along the way, the share price gained 35% per year, a solid pop by our standards. But it does seem like the market is paying attention to strong revenue growth. That's not to say we think the share price is too high. In fact, it might be worth keeping an eye on this one.

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

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. It might be well worthwhile taking a look at our free report on Tinybeans Group's earnings, revenue and cash flow.

A Different Perspective

Tinybeans Group shareholders are down 31% for the year, but the broader market is up 3.7%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Fortunately the longer term story is brighter, with total returns averaging about 35% per year over three years. Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. It's always interesting to track share price performance over the longer term. But to understand Tinybeans Group better, we need to consider many other factors. Case in point: We've spotted 6 warning signs for Tinybeans Group you should be aware of, and 1 of them doesn't sit too well with us.

Tinybeans Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU 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 (at) simplywallst.com.