Yahoo Finance Is Creso Pharma's (ASX:CPH) 227% Share Price Increase Well Justified?
It hasn't been the best quarter for Creso Pharma Limited (ASX:CPH) shareholders, since the share price has fallen 15% in that time. On the other hand, over the last twelve months the stock has delivered rather impressive returns. During that period, the share price soared a full 227%. So some might not be surprised to see the price retrace some. Investors should be wondering whether the business itself has the fundamental value required to continue to drive gains.
View our latest analysis for Creso Pharma
Given that Creso Pharma didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. 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.
In the last year Creso Pharma saw its revenue shrink by 33%. We're a little surprised to see the share price pop 227% in the last year. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. Of course, it could be that the market expected this revenue drop.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
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
We're pleased to report that Creso Pharma rewarded shareholders with a total shareholder return of 227% over the last year. This recent result is much better than the 21% drop suffered by shareholders each year (on average) over the last three. It could well be that the business has turned around -- or else regained the confidence of investors. It's always interesting to track share price performance over the longer term. But to understand Creso Pharma better, we need to consider many other factors. For instance, we've identified 5 warning signs for Creso Pharma (3 are potentially serious) that you should be aware of.
We will like Creso Pharma better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU 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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