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The IronNet, Inc. (NYSE:IRNT) share price has had a bad week, falling 25%. Looking on the brighter side, the stock is actually up over twelve months. In that time, it is up 22%, which isn't bad, but is below the market return of 36%.
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.
IronNet 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. 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.
IronNet grew its revenue by 2.6% last year. That's not a very high growth rate considering it doesn't make profits. Over that time the share price gained a very modest 22%. A closer look at the bottom line might reveal an opportunity.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. You can see what analysts are predicting for IronNet in this interactive graph of future profit estimates.
A Different Perspective
We're happy to report that IronNet are up 22% over the year. The bad news is that's no better than the average market return, which was roughly 36%. However, that falls short of the 23% gain it has made, for shareholders, in the last three months. The very recent increase in the share price could be evidence that the narrative is changing for the better due to fundamental improvements. It's always interesting to track share price performance over the longer term. But to understand IronNet better, we need to consider many other factors. Take risks, for example - IronNet has 5 warning signs (and 3 which can't be ignored) we think you should know about.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
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. 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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