- Oops!Something went wrong.Please try again later.
It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero. But in contrast you can make much more than 100% if the company does well. For instance the Domo, Inc. (NASDAQ:DOMO) share price is 248% higher than it was three years ago. Most would be happy with that. On top of that, the share price is up 40% in about a quarter. This could be related to the recent financial results, released recently - you can catch up on the most recent data by reading our company report.
Because Domo 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.
In the last 3 years Domo saw its revenue grow at 20% per year. That's much better than most loss-making companies. Along the way, the share price gained 52% per year, a solid pop by our standards. This suggests the market has recognized the progress the business has made, at least to a significant degree. That's not to say we think the share price is too high. In fact, it might be worth keeping an eye on this one.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
This free interactive report on Domo's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Pleasingly, Domo's total shareholder return last year was 140%. That's better than the annualized TSR of 52% over the last three years. Given the track record of solid returns over varying time frames, it might be worth putting Domo on your watchlist. It's always interesting to track share price performance over the longer term. But to understand Domo better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 5 warning signs with Domo (at least 1 which is potentially serious) , and understanding them should be part of your investment process.
Of course Domo may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
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 (at) simplywallst.com.