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Rosetta Stone (NYSE:RST) Shareholders Have Enjoyed An Impressive 190% Share Price Gain

Simply Wall St

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The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But when you pick a company that is really flourishing, you can make more than 100%. To wit, the Rosetta Stone Inc. (NYSE:RST) share price has flown 190% in the last three years. Most would be happy with that. We note the stock price is up 3.2% in the last seven days.

View our latest analysis for Rosetta Stone

Rosetta Stone isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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.

Rosetta Stone actually saw its revenue drop by 6.1% per year over three years. So the share price gain of 43% per year is quite surprising. It's a good reminder that expectations about the future, not the past history, always impact share prices.

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

NYSE:RST Income Statement, July 12th 2019

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

We're pleased to report that Rosetta Stone shareholders have received a total shareholder return of 42% over one year. That's better than the annualised return of 20% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. If you would like to research Rosetta Stone in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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.