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For many, the main point of investing in the stock market is to achieve spectacular returns. While not every stock performs well, when investors win, they can win big. For example, CarParts.com, Inc. (NASDAQ:PRTS) has generated a beautiful 727% return in just a single year. And in the last month, the share price has gained 6.2%. And shareholders have also done well over the long term, with an increase of 445% in the last three years.
It really delights us to see such great share price performance for investors.
Because CarParts.com 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over the last twelve months, CarParts.com's revenue grew by 20%. We respect that sort of growth, no doubt. Arguably it's more than reflected in the truly wondrous share price gain of 727% in the last year. We're always cautious when the share price is up so much, but there's certainly enough revenue growth to justify taking a closer look at CarParts.com.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. If you are thinking of buying or selling CarParts.com stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
It's good to see that CarParts.com has rewarded shareholders with a total shareholder return of 727% in the last twelve months. That's better than the annualised return of 40% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand CarParts.com better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with CarParts.com , and understanding them should be part of your investment process.
There are plenty of other companies that have insiders buying up shares. You probably do 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.
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