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Did You Miss SeaChange International's (NASDAQ:SEAC) Impressive 246% Share Price Gain?

Simply Wall St

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you pick the right business to buy shares in, you can make more than you can lose. Take, for example SeaChange International, Inc. (NASDAQ:SEAC). Its share price is already up an impressive 246% in the last twelve months. Also pleasing for shareholders was the 32% gain in the last three months. 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. Looking back further, the stock price is 64% higher than it was three years ago.

See our latest analysis for SeaChange International

SeaChange International wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last year SeaChange International saw its revenue shrink by 5.3%. We're a little surprised to see the share price pop 246% in the last year. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. It's quite likely the revenue fall was already priced in, anyway.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

NasdaqGS:SEAC Income Statement, December 20th 2019

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. If you are thinking of buying or selling SeaChange International stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

We're pleased to report that SeaChange International shareholders have received a total shareholder return of 246% over one year. Notably the five-year annualised TSR loss of 9.1% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of SeaChange International by clicking this link.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

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. Thank you for reading.