Swelling losses haven't held back gains for Vertex (NASDAQ:VERX) shareholders since they're up 48% over 1 year
It hasn't been the best quarter for Vertex, Inc. (NASDAQ:VERX) shareholders, since the share price has fallen 11% in that time. But that doesn't change the reality that over twelve months the stock has done really well. In that time we've seen the stock easily surpass the market return, with a gain of 48%.
While this past week has detracted from the company's one-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.
Check out our latest analysis for Vertex
Vertex isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Vertex grew its revenue by 15% last year. That's a fairly respectable growth rate. Buyers pushed the share price 48% in response, which isn't unreasonable. If the company can maintain the revenue growth, the share price could go higher still. But before deciding this growth stock is underappreciated, you might want to check out profitability trends (and cash flow)
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Vertex is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. If you are thinking of buying or selling Vertex stock, you should check out this free report showing analyst consensus estimates for future profits.
A Different Perspective
Pleasingly, Vertex's total shareholder return last year was 48%. What is absolutely clear is that is far preferable to the dismal 7% average annual loss suffered over the last three years. We're generally cautious about putting too much weigh on shorter term data, but the recent improvement is definitely a positive. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Vertex , and understanding them should be part of your investment process.
We will like Vertex better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, 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.
