The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But in contrast you can make much more than 100% if the company does well. For example, the Uranium Royalty Corp. (TSE:URC) share price has soared 160% in the last three years. How nice for those who held the stock! And in the last week the share price has popped 6.2%. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.
Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.
View our latest analysis for Uranium Royalty
Uranium Royalty 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. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Uranium Royalty's revenue trended up 171% each year over three years. That's much better than most loss-making companies. Along the way, the share price gained 38% 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.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of Uranium Royalty's earnings, revenue and cash flow.
A Different Perspective
Uranium Royalty shareholders are down 6.8% for the year, but the broader market is up 11%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Fortunately the longer term story is brighter, with total returns averaging about 38% per year over three years. Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. It's always interesting to track share price performance over the longer term. But to understand Uranium Royalty better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Uranium Royalty (of which 1 makes us a bit uncomfortable!) you should know about.