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Is iSignthis's (ASX:ISX) Share Price Gain Of 255% Well Earned?

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When you buy shares in a company, there is always a risk that the price drops to zero. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the iSignthis Ltd (ASX:ISX) share price had more than doubled in just one year - up 255%. It's also good to see the share price up 87% over the last quarter. And shareholders have also done well over the long term, with an increase of 178% in the last three years.

Check out our latest analysis for iSignthis

Given that iSignthis didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Over the last twelve months, iSignthis's revenue grew by 222%. That's a head and shoulders above most loss-making companies. And the share price has responded, gaining 255% 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).

ASX:ISX Income Statement, July 15th 2019
ASX:ISX Income Statement, July 15th 2019

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

We're pleased to report that iSignthis rewarded shareholders with a total shareholder return of 255% over the last year. That's better than the annualized TSR of 41% over the last three years. Given the track record of solid returns over varying time frames, it might be worth putting iSignthis on your watchlist. You could get a better understanding of iSignthis's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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 editorial-team@simplywallst.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.