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The most you can lose on any stock (assuming you don’t use leverage) is 100% of your money. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Funko, Inc. (NASDAQ:FNKO) share price had more than doubled in just one year – up 169%. It’s also good to see the share price up 75% over the last quarter. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report. Note that businesses generally develop over the long term, so it the returns over the last year might not reflect a long term trend.
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During the last year Funko saw its earnings per share (EPS) increase strongly. This remarkable growth rate may not be sustainable, but it is still impressive. So we’d expect to see the share price higher. To us, inflection points like this are the best time to take a close look at a stock.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
We know that Funko has improved its bottom line lately, but is it going to grow revenue? This free report showing analyst revenue forecasts should help you figure out if the EPS growth can be sustained.
A Different Perspective
It’s nice to see that Funko shareholders have gained 169% over the last year. And the share price momentum remains respectable, with a gain of 75% in the last three months. 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. Is Funko cheap compared to other companies? These 3 valuation measures might help you decide.
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 US 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.