These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But investors can boost returns by picking market-beating companies to own shares in. For example, the Laureate Education, Inc. (NASDAQ:LAUR) share price is up 12% in the last year, clearly besting than the market return of around 7.6% (not including dividends). That's a solid performance by our standards! We'll need to follow Laureate Education for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.
We don't think that Laureate Education's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.
In the last year Laureate Education saw its revenue shrink by 1.1%. Despite the lack of revenue growth, the stock has returned a solid 12% the last twelve months. We can correlate the share price rise with revenue or profit growth, but it seems the market had previously expected weaker results, and sentiment around the stock is improving.
Depicted in the graphic below, you'll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
We know that Laureate Education has improved its bottom line lately, but what does the future have in store? If you are thinking of buying or selling Laureate Education stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
Laureate Education shareholders should be happy with the total gain of 12% over the last twelve months. We regret to report that the share price is down 0.3% over ninety days. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. If you would like to research Laureate Education in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
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.
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 email@example.com. 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.