For many, the main point of investing in the stock market is to achieve spectacular returns. When you find (and hold) a big winner, you can markedly improve your finances. For example, BSQUARE Corporation (NASDAQ:BSQR) has generated a beautiful 522% return in just a single year. Shareholders are also celebrating an even better 594% rise, over the last three months. Looking back further, the stock price is 105% higher than it was three years ago.
Anyone who held for that rewarding ride would probably be keen to talk about it.
Because BSQUARE 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. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last year BSQUARE saw its revenue shrink by 15%. This is in stark contrast to the splendorous stock price, which has rocketed 522% since this time a year ago. There can be no doubt this kind of decoupling of revenue growth and share price growth is unusual to see in loss making companies. While this gain looks like speculative buying to us, sometimes speculation pays off.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
This free interactive report on BSQUARE's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
We're pleased to report that BSQUARE shareholders have received a total shareholder return of 522% over one year. That gain is better than the annual TSR over five years, which is 10%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 3 warning signs for BSQUARE you should be aware of, and 1 of them is concerning.
But note: BSQUARE may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
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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