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Does Forescout Technologies's (NASDAQ:FSCT) Share Price Gain of 33% Match Its Business Performance?

Simply Wall St

If you want to compound wealth in the stock market, you can do so by buying an index fund. But you can significantly boost your returns by picking above-average stocks. For example, the Forescout Technologies, Inc. (NASDAQ:FSCT) share price is up 33% in the last year, clearly besting the market return of around 14% (not including dividends). That's a solid performance by our standards! Forescout Technologies hasn't been listed for long, so it's still not clear if it is a long term winner.

See our latest analysis for Forescout Technologies

Given that Forescout Technologies didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Forescout Technologies grew its revenue by 20% last year. That's a fairly respectable growth rate. While the share price performed well, gaining 33% over twelve months, you could argue the revenue growth warranted it. If the company can maintain the revenue growth, the share price could go higher still. But before deciding this growth stock is underappreciated, you might want to check out profitability trends (and cash flow)

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

NasdaqGM:FSCT Income Statement, December 4th 2019

It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. This free report showing analyst forecasts should help you form a view on Forescout Technologies

A Different Perspective

Forescout Technologies boasts a total shareholder return of 33% for the last year. Unfortunately the share price is down 3.3% over the last quarter. 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 want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares - and the price they paid.

Forescout Technologies 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.

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.