Advertisement
U.S. markets close in 3 hours 24 minutes
  • S&P 500

    5,251.13
    +2.64 (+0.05%)
     
  • Dow 30

    39,760.80
    +0.72 (+0.00%)
     
  • Nasdaq

    16,383.45
    -16.07 (-0.10%)
     
  • Russell 2000

    2,133.44
    +19.09 (+0.90%)
     
  • Crude Oil

    82.65
    +1.30 (+1.60%)
     
  • Gold

    2,237.90
    +25.20 (+1.14%)
     
  • Silver

    24.90
    +0.15 (+0.60%)
     
  • EUR/USD

    1.0805
    -0.0025 (-0.23%)
     
  • 10-Yr Bond

    4.1870
    -0.0090 (-0.21%)
     
  • GBP/USD

    1.2642
    +0.0004 (+0.03%)
     
  • USD/JPY

    151.3100
    +0.0640 (+0.04%)
     
  • Bitcoin USD

    70,954.06
    +1,866.91 (+2.70%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,961.31
    +29.33 (+0.37%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

Did The Underlying Business Drive Dyadic International's (NASDAQ:DYAI) Lovely 321% Share Price Gain?

For us, stock picking is in large part the hunt for the truly magnificent stocks. You won't get it right every time, but when you do, the returns can be truly splendid. Take, for example, the Dyadic International, Inc. (NASDAQ:DYAI) share price, which skyrocketed 321% over three years. And in the last month, the share price has gained -0.6%.

View our latest analysis for Dyadic International

Dyadic International recorded just US$1,689,172 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. For example, they may be hoping that Dyadic International comes up with a great new product, before it runs out of money.

Companies that lack both meaningful revenue and profits are usually considered high risk. You should be aware that there is always a chance that this sort of company will need to issue more shares to raise money to continue pursuing its business plan. While some such companies do very well over the long term, others become hyped up by promoters before eventually falling back down to earth, and going bankrupt (or being recapitalized). Some Dyadic International investors have already had a taste of the sweet taste stocks like this can leave in the mouth, as they gain popularity and attract speculative capital.

Dyadic International has plenty of cash in the bank, with cash in excess of all liabilities sitting at US$29m, when it last reported (September 2020). That allows management to focus on growing the business, and not worry too much about raising capital. And with the share price up 56% per year, over 3 years , the market is focussed on that blue sky potential. The image below shows how Dyadic International's balance sheet has changed over time; if you want to see the precise values, simply click on the image.

debt-equity-history-analysis
debt-equity-history-analysis

It can be extremely risky to invest in a company that doesn't even have revenue. There's no way to know its value easily. However you can take a look at whether insiders have been buying up shares. It's often positive if so, assuming the buying is sustained and meaningful. You can click here to see if there are insiders buying.

A Different Perspective

Dyadic International shareholders are up 2.7% for the year. But that return falls short of the market. It's probably a good sign that the company has an even better long term track record, having provided shareholders with an annual TSR of 32% over five years. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. It's always interesting to track share price performance over the longer term. But to understand Dyadic International better, we need to consider many other factors. For example, we've discovered 3 warning signs for Dyadic International (1 doesn't sit too well with us!) that you should be aware of before investing here.

Of course Dyadic International may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

Advertisement