The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Bubs Australia Limited (ASX:BUB) share price has soared 109% return in just a single year. On top of that, the share price is up 41% in about a quarter. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report. Bubs Australia hasn't been listed for long, so it's still not clear if it is a long term winner.
Because Bubs Australia is loss-making, 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last year Bubs Australia saw its revenue grow by 160%. That's well above most other pre-profit companies. And the share price has responded, gaining 109% as we previously mentioned. 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.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
It's nice to see that Bubs Australia shareholders have gained 109% over the last year. A substantial portion of that gain has come in the last three months, with the stock up 41% 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. Before spending more time on Bubs Australia it might be wise to click here to see if insiders have been buying or selling shares.
We will like Bubs Australia 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 AU 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.