Olo (NYSE:OLO) shareholders are up 4.3% this past week, but still in the red over the last year
While it may not be enough for some shareholders, we think it is good to see the Olo Inc. (NYSE:OLO) share price up 24% in a single quarter. But that doesn't change the fact that the returns over the last year have been less than pleasing. In fact the stock is down 41% in the last year, well below the market return.
On a more encouraging note the company has added US$52m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.
See our latest analysis for Olo
Olo wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Olo grew its revenue by 24% over the last year. We think that is pretty nice growth. Unfortunately that wasn't good enough to stop the share price dropping 41%. This implies the market was expecting better growth. But if revenue keeps growing, then at a certain point the share price would likely follow.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
We doubt Olo shareholders are happy with the loss of 41% over twelve months. That falls short of the market, which lost 10%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. It's great to see a nice little 24% rebound in the last three months. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. 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. Take risks, for example - Olo has 2 warning signs we think you should be aware of.
Olo is not the only stock insiders are buying. So take a peek at this free list of growing companies with 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.
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