Plexure Group Limited (NZSE:PX1) shareholders might be concerned after seeing the share price drop 25% in the last quarter. But over three years the performance has been really wonderful. Indeed, the share price is up a whopping 475% in that time. Arguably, the recent fall is to be expected after such a strong rise. The only way to form a view of whether the current price is justified is to consider the merits of the business itself.
View our latest analysis for Plexure Group
Plexure Group 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last 3 years Plexure Group saw its revenue grow at 36% per year. That's well above most pre-profit companies. And it's not just the revenue that is taking off. The share price is up 79% per year in that time. Despite the strong run, top performers like Plexure Group have been known to go on winning for decades. So we'd recommend you take a closer look at this one, or even put it on your watchlist.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
It's good to see that Plexure Group has rewarded shareholders with a total shareholder return of 51% in the last twelve months. That gain is better than the annual TSR over five years, which is 19%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. Even so, be aware that Plexure Group is showing 5 warning signs in our investment analysis , and 1 of those is concerning...
But note: Plexure Group may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on NZ 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.
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