The nature of investing is that you win some, and you lose some. Unfortunately, shareholders of SharpSpring, Inc. (NASDAQ:SHSP) have suffered share price declines over the last year. The share price is down a hefty 59% in that time. Longer term investors have fared much better, since the share price is up 42% in three years. Unfortunately the share price momentum is still quite negative, with prices down 47% in thirty days. Importantly, this could be a market reaction to the recently released financial results. You can check out the latest numbers in our company report.
Because SharpSpring 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
SharpSpring grew its revenue by 22% over the last year. That's definitely a respectable growth rate. Meanwhile, the share price tanked 59%, suggesting the market had much higher expectations. It is of course possible that the business will still deliver strong growth, it will just take longer than expected to do it. To our minds it isn't enough to just look at revenue, anyway. Always consider when profits will flow.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
If you are thinking of buying or selling SharpSpring stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
While the broader market lost about 7.2% in the twelve months, SharpSpring shareholders did even worse, losing 59%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 5.2%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand SharpSpring better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for SharpSpring you should be aware of.
We will like SharpSpring 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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. Thank you for reading.