U.S. markets open in 7 hours 9 minutes
  • S&P Futures

    4,124.25
    +17.25 (+0.42%)
     
  • Dow Futures

    34,058.00
    +120.00 (+0.35%)
     
  • Nasdaq Futures

    13,174.00
    +73.75 (+0.56%)
     
  • Russell 2000 Futures

    2,177.80
    +9.20 (+0.42%)
     
  • Crude Oil

    63.51
    -0.31 (-0.49%)
     
  • Gold

    1,827.00
    +3.00 (+0.16%)
     
  • Silver

    27.12
    +0.07 (+0.24%)
     
  • EUR/USD

    1.2102
    +0.0018 (+0.15%)
     
  • 10-Yr Bond

    1.6680
    0.0000 (0.00%)
     
  • Vix

    23.13
    -4.46 (-16.17%)
     
  • GBP/USD

    1.4043
    -0.0009 (-0.06%)
     
  • USD/JPY

    109.4900
    +0.0560 (+0.05%)
     
  • BTC-USD

    49,245.89
    -1,816.39 (-3.56%)
     
  • CMC Crypto 200

    1,360.24
    -27.67 (-1.99%)
     
  • FTSE 100

    6,963.33
    -41.30 (-0.59%)
     
  • Nikkei 225

    28,084.47
    +636.46 (+2.32%)
     

Did The Underlying Business Drive Lantronix's (NASDAQ:LTRX) Lovely 328% Share Price Gain?

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

Buying shares in the best businesses can build meaningful wealth for you and your family. And highest quality companies can see their share prices grow by huge amounts. Just think about the savvy investors who held Lantronix, Inc. (NASDAQ:LTRX) shares for the last five years, while they gained 328%. And this is just one example of the epic gains achieved by some long term investors. In the last week shares have slid back 1.1%.

See our latest analysis for Lantronix

Lantronix 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

For the last half decade, Lantronix can boast revenue growth at a rate of 8.7% per year. That's a pretty good long term growth rate. However, the share price gain of 34% during the period is considerably stronger. It might not be cheap but a (long-term) growth stock like this is usually well worth taking a closer look at.

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

earnings-and-revenue-growth
earnings-and-revenue-growth

Take a more thorough look at Lantronix's financial health with this free report on its balance sheet.

A Different Perspective

It's nice to see that Lantronix shareholders have received a total shareholder return of 68% over the last year. That's better than the annualised return of 34% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 2 warning signs for Lantronix that you should be aware of before investing here.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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.