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Titomic Limited (ASX:TTT) shareholders have seen the share price descend 28% over the month. But that doesn't change the fact that the returns over the last year have been spectacular. Indeed, the share price is up a whopping 339% in that time. So it is not that surprising to see the stock retrace a little. Only time will tell if there is still too much optimism currently reflected in the share price.
In light of the stock dropping 18% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive one-year return.
See our latest analysis for Titomic
Titomic isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually desire strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.
Over the last twelve months, Titomic's revenue grew by 71%. That's well above most other pre-profit companies. But the share price seems headed to the moon, up 339% as previously highlighted. Even the most bullish shareholders might be thinking that the share price might drop back a bit, after a gain like that. So this looks like a great watchlist candidate for investors who look for high growth inflexion points.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
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 Titomic has rewarded shareholders with a total shareholder return of 339% in the last twelve months. Notably the five-year annualised TSR loss of 9% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. 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. For instance, we've identified 4 warning signs for Titomic that you should be aware of.
Of course Titomic may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Australian 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.