Syrah Resources Limited (ASX:SYR) shareholders might be concerned after seeing the share price drop 17% in the last quarter. But that doesn't detract from the splendid returns of the last year. Like an eagle, the share price soared 229% in that time. So it may be that the share price is simply cooling off after a strong rise. More important, going forward, is how the business itself is going.
Given that Syrah Resources 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 Syrah Resources saw its revenue shrink by 85%. We're a little surprised to see the share price pop 229% 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).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. You can see what analysts are predicting for Syrah Resources in this interactive graph of future profit estimates.
A Different Perspective
It's good to see that Syrah Resources has rewarded shareholders with a total shareholder return of 229% in the last twelve months. That certainly beats the loss of about 13% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Syrah Resources better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Syrah Resources you should be aware of.
Syrah Resources is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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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