Investing in Natural Gas Services Group (NYSE:NGS) three years ago would have delivered you a 103% gain
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 instance the Natural Gas Services Group, Inc. (NYSE:NGS) share price is 103% higher than it was three years ago. How nice for those who held the stock! On top of that, the share price is up 28% in about a quarter.
So let's assess the underlying fundamentals over the last 3 years and see if they've moved in lock-step with shareholder returns.
Check out our latest analysis for Natural Gas Services Group
While Natural Gas Services Group made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.
Over the last three years Natural Gas Services Group has grown its revenue at 15% annually. That's pretty nice growth. Broadly speaking, this solid progress may well be reflected by the healthy share price gain of 27% per year over three years. It's hard to value pre-profit businesses, but it seems like the market has become a lot more optimistic about this one! It would be worth thinking about when profits will flow, since that milestone will attract more attention.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
We know that Natural Gas Services Group has improved its bottom line lately, but what does the future have in store? This free report showing analyst forecasts should help you form a view on Natural Gas Services Group
A Different Perspective
It's nice to see that Natural Gas Services Group shareholders have received a total shareholder return of 89% over the last year. That's better than the annualised return of 1.4% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Natural Gas Services Group is showing 2 warning signs in our investment analysis , and 1 of those can't be ignored...
We will like Natural Gas Services Group 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 American exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
