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When you buy shares in a company, there is always a risk that the price drops to zero. 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 Alteryx, Inc. (NYSE:AYX) share price has soared 138% in the last year. Most would be very happy with that, especially in just one year! It’s also good to see the share price up 45% over the last quarter. But this move may well have been assisted by the reasonably buoyant market (up 18% in 90 days). Note that businesses generally develop over the long term, so it the returns over the last year might not reflect a long term trend.
Given that Alteryx only made minimal earnings in the last twelve months, we’ll focus on revenue to gauge its business development. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.
In the last year Alteryx saw its revenue grow by 93%. That’s a head and shoulders above most loss-making companies. And the share price has responded, gaining 138% as we previously mentioned. It’s great to see strong revenue growth, but the question is whether it can be sustained. The strong share price rise indicates optimism, so there may be a better opportunity for buyers as the hype fades a bit.
The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).
We’re pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It’s always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. If you are thinking of buying or selling Alteryx stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
It’s nice to see that Alteryx shareholders have gained 138% over the last year. A substantial portion of that gain has come in the last three months, with the stock up 45% in that time. This suggests the company is continuing to win over new investors. If you would like to research Alteryx in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
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 email@example.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. Thank you for reading.