Route1 Inc. (CVE:ROI) shareholders have seen the share price descend 13% over the month. But that doesn’t detract from the splendid returns of the last year. During that period, the share price soared a full 250%. So some might not be surprised to see the price retrace some. The real question is whether the business is trending in the right direction.
Given that Route1 only made minimal earnings in the last twelve months, we’ll focus on revenue to gauge its business development. Generally speaking, companies that are not judged on their (small) profits should be growing revenue quickly. That’s because it’s hard for shareholders to have confidence a company will grow profits significantly if it isn’t growing revenue.
Over the last twelve months, Route1’s revenue grew by 261%. That’s a head and shoulders above most loss-making companies. Meanwhile, the market has paid attention, sending the share price soaring 250% in response. That sort of revenue growth is bound to attract attention, even if the company doesn’t turn a profit. Given the positive sentiment around the stock we’re cautious, but there’s no doubt its worth watching.
The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).
Take a more thorough look at Route1’s financial health with this free report on its balance sheet.
A Different Perspective
We’re pleased to report that Route1 shareholders have received a total shareholder return of 250% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 9.2% per year), it would seem that the stock’s performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.
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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.