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Everbridge, Inc. (NASDAQ:EVBG) shareholders might be concerned after seeing the share price drop 15% in the last week. But that doesn't change the fact that the returns over the last three years have been very strong. Indeed, the share price is up a very strong 184% in that time. So the recent fall in the share price should be viewed in that context. The thing to consider is whether the underlying business is doing well enough to support the current price.
Because Everbridge made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over the last three years Everbridge has grown its revenue at 31% annually. That's well above most pre-profit companies. Along the way, the share price gained 42% per year, a solid pop by our standards. But it does seem like the market is paying attention to strong revenue growth. Nonetheless, we'd say Everbridge is still worth investigating - successful businesses can often keep growing for long periods.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
Everbridge is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for Everbridge in this interactive graph of future profit estimates.
A Different Perspective
The last twelve months weren't great for Everbridge shares, which cost holders 14%, while the market was up about 55%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Investors are up over three years, booking 42% per year, much better than the more recent returns. Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. It's always interesting to track share price performance over the longer term. But to understand Everbridge better, we need to consider many other factors. Case in point: We've spotted 5 warning signs for Everbridge you should be aware of, and 1 of them is a bit unpleasant.
We will like Everbridge 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 US 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.
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