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The MDJM (NASDAQ:MDJH) Share Price Has Gained 48% And Shareholders Are Hoping For More

Simply Wall St
·3 mins read

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the MDJM Ltd. (NASDAQ:MDJH) share price is up 48% in the last year, clearly besting the market return of around 22% (not including dividends). If it can keep that out-performance up over the long term, investors will do very well! We'll need to follow MDJM for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

View our latest analysis for MDJM

We don't think that MDJM's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. 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 twelve months, MDJM's revenue grew by 136%. That's a head and shoulders above most loss-making companies. The solid 48% share price gain goes down pretty well, but it's not necessarily as good as you might expect given the top notch revenue growth. If that's the case, now might be the time to take a close look at MDJM. Human beings have trouble conceptualizing (and valuing) exponential growth. Is that what we're seeing here?

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth
earnings-and-revenue-growth

Take a more thorough look at MDJM's financial health with this free report on its balance sheet.

A Different Perspective

MDJM boasts a total shareholder return of 48% for the last year. A substantial portion of that gain has come in the last three months, with the stock up 59% 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. 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. For instance, we've identified 3 warning signs for MDJM (1 shouldn't be ignored) that you should be aware of.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.