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Did Ranger Energy Services's (NYSE:RNGR) Share Price Deserve to Gain 19%?

Simply Wall St

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The simplest way to invest in stocks is to buy exchange traded funds. But investors can boost returns by picking market-beating companies to own shares in. For example, the Ranger Energy Services, Inc. (NYSE:RNGR) share price is up 19% in the last year, clearly besting than the market return of around 9.7% (not including dividends). That's a solid performance by our standards! Ranger Energy Services hasn't been listed for long, so it's still not clear if it is a long term winner.

View our latest analysis for Ranger Energy Services

Ranger Energy Services isn't a profitable company, so 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. 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.

In the last year Ranger Energy Services saw its revenue grow by 97%. That's stonking growth even when compared to other loss-making stocks. While the share price gain of 19% over twelve months is pretty tasty, you might argue it doesn't fully reflect the strong revenue growth. If that's the case, now might be the time to take a close look at Ranger Energy Services. Human beings have trouble conceptualizing (and valuing) exponential growth. Is that what we're seeing here?

You can see how revenue and earnings have changed over time in the image below, (click on the chart to see cashflow).

NYSE:RNGR Income Statement, April 7th 2019

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. You can see what analysts are predicting for Ranger Energy Services in this interactive graph of future profit estimates.

A Different Perspective

Ranger Energy Services boasts a total shareholder return of 19% for the last year. A substantial portion of that gain has come in the last three months, with the stock up 33% in that time. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. 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 Ranger Energy Services by clicking this link.

Ranger Energy Services 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 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 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. Thank you for reading.