This month, we saw the iCandy Interactive Limited (ASX:ICI) up an impressive 47%. But that doesn’t change the fact that the returns over the last three years have been disappointing. Regrettably, the share price slid 60% in that period. So it’s good to see it climbing back up. After all, could be that the fall was overdone.
See our latest analysis for iCandy Interactive
Given that iCandy Interactive 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 three years, iCandy Interactive saw its revenue grow by 20% per year, compound. That’s a fairly respectable growth rate. So some shareholders would be frustrated with the compound loss of 26% per year. The market must have had really high expectations to be disappointed with this progress. So this is one stock that might be worth investigating further, or even adding to your watchlist.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
Take a more thorough look at iCandy Interactive’s financial health with this free report on its balance sheet.
A Different Perspective
Over the last year, iCandy Interactive shareholders took a loss of 60%. In contrast the market gained about 3.5%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The three-year loss of 26% per year isn’t as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. Although Baron Rothschild famously said to “buy when there’s blood in the streets, even if the blood is your own”, he also focusses on high quality stocks with solid prospects. 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. Like risks, for instance. Every company has them, and we’ve spotted 7 warning signs for iCandy Interactive (of which 3 make us uncomfortable!) you should know about.
Of course iCandy Interactive 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 AU exchanges.
If you spot an error that warrants correction, please contact the editor at [email protected] 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. Simply Wall St has no position in the stocks mentioned.
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