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For many, the main point of investing in the stock market is to achieve spectacular returns. When an investor finds a multi-bagger (a stock that goes up over 200%), it makes a big difference to their portfolio. For example, Dimerix Limited (ASX:DXB) has generated a beautiful 359% return in just a single year. On top of that, the share price is up 74% in about a quarter. And shareholders have also done well over the long term, with an increase of 55% in the last three years.
Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.
View our latest analysis for Dimerix
Dimerix 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. Shareholders of unprofitable companies usually desire strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Dimerix grew its revenue by 41% last year. That's a fairly respectable growth rate. But the market is even more excited about it, with the price apparently bound for the moon, up 359% in one of earth's orbits. While we are always careful about jumping on a hot stock too late, there's certainly good reason to keep an eye on Dimerix.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
If you are thinking of buying or selling Dimerix stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
We're pleased to report that Dimerix shareholders have received a total shareholder return of 359% over one year. That gain is better than the annual TSR over five years, which is 35%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Dimerix (of which 2 are a bit unpleasant!) you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.