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Is Dropsuite's (ASX:DSE) Share Price Gain Of 183% Well Earned?

Simply Wall St
·3 min read

Unless you borrow money to invest, the potential losses are limited. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the Dropsuite Limited (ASX:DSE) share price has soared 183% return in just a single year. It's also up 103% in about a month. It is also impressive that the stock is up 73% over three years, adding to the sense that it is a real winner.

View our latest analysis for Dropsuite

Given that Dropsuite 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Dropsuite actually shrunk its revenue over the last year, with a reduction of 1.6%. We're a little surprised to see the share price pop 183% in the last year. It just goes to show the market doesn't always pay attention to the reported numbers. Of course, it could be that the market expected this revenue drop.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

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

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

A Different Perspective

We're pleased to report that Dropsuite rewarded shareholders with a total shareholder return of 183% over the last year. That gain actually surpasses the 20% TSR it generated (per year) over three years. These improved returns may hint at some real business momentum, implying that now could be a great time to delve deeper. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Dropsuite is showing 4 warning signs in our investment analysis , you should know about...

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 AU 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@simplywallst.com.