When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Ero Copper Corp. (TSE:ERO) share price had more than doubled in just one year - up 100%. Also pleasing for shareholders was the 50% gain in the last three months. We'll need to follow Ero Copper for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.
Ero Copper isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over the last twelve months, Ero Copper's revenue grew by 57%. That's a head and shoulders above most loss-making companies. And the share price has responded, gaining 100% as we previously mentioned. It's great to see strong revenue growth, but the question is whether it can be sustained. Given the positive sentiment around the stock we're cautious, but there's no doubt its worth watching.
You can see how revenue and earnings have changed over time in the image below, (click on the chart to see cashflow).
This free interactive report on Ero Copper's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Ero Copper boasts a total shareholder return of 100% for the last year. A substantial portion of that gain has come in the last three months, with the stock up 50% 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. You could get a better understanding of Ero Copper's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
We will like Ero Copper better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA 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 firstname.lastname@example.org. 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.