It hasn’t been the best quarter for Genasys Inc. (NASDAQ:GNSS) shareholders, since the share price has fallen 20% in that time. But that doesn’t change the fact that the returns over the last five years have been respectable. It’s good to see the share price is up 77% in that time, better than its market return of 76%. While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 45% drop, in the last year.
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.
Given that Genasys 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
For the last half decade, Genasys can boast revenue growth at a rate of 18% per year. Even measured against other revenue-focussed companies, that’s a good result. While the compound gain of 12% per year is good, it’s not unreasonable given the strong revenue growth. If you think there could be more growth to come, now might be the time to take a close look at Genasys. Of course, you’ll have to research the business more fully to figure out if this is an attractive opportunity.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. This free report showing analyst forecasts should help you form a view on Genasys
A Different Perspective
We regret to report that Genasys shareholders are down 45% for the year. Unfortunately, that’s worse than the broader market decline of 15%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there’s a good opportunity. Longer term investors wouldn’t be so upset, since they would have made 12%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.
Genasys is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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.
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