UK markets close in 2 hours 17 minutes
  • FTSE 100

    7,142.04
    +7.98 (+0.11%)
     
  • FTSE 250

    22,740.46
    +6.33 (+0.03%)
     
  • AIM

    1,252.41
    +2.76 (+0.22%)
     
  • GBP/EUR

    1.1637
    -0.0011 (-0.09%)
     
  • GBP/USD

    1.4114
    -0.0003 (-0.02%)
     
  • BTC-GBP

    28,493.46
    +2,921.25 (+11.42%)
     
  • CMC Crypto 200

    997.45
    +55.63 (+5.91%)
     
  • S&P 500

    4,247.44
    +8.26 (+0.19%)
     
  • DOW

    34,479.60
    +13.40 (+0.04%)
     
  • CRUDE OIL

    71.69
    +0.78 (+1.10%)
     
  • GOLD FUTURES

    1,851.10
    -28.50 (-1.52%)
     
  • NIKKEI 225

    29,161.80
    +213.07 (+0.74%)
     
  • HANG SENG

    28,842.13
    +103.23 (+0.36%)
     
  • DAX

    15,707.39
    +14.12 (+0.09%)
     
  • CAC 40

    6,606.58
    +5.92 (+0.09%)
     

Entain (LON:ENT) Has Gifted Shareholders With A Fantastic 250% Total Return On Their Investment

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·3-min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But when you pick a company that is really flourishing, you can make more than 100%. One great example is Entain Plc (LON:ENT) which saw its share price drive 202% higher over five years. It's also good to see the share price up 26% over the last quarter.

Check out our latest analysis for Entain

While Entain made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

For the last half decade, Entain can boast revenue growth at a rate of 45% per year. That's well above most pre-profit companies. Meanwhile, its share price performance certainly reflects the strong growth, given the share price grew at 25% per year, compound, during the period. So it seems likely that buyers have paid attention to the strong revenue growth. To our minds that makes Entain worth investigating - it may have its best days ahead.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth
earnings-and-revenue-growth

We consider it positive that insiders have made significant purchases in the last year. 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 Entain in this interactive graph of future profit estimates.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Entain's total shareholder return (TSR) and its share price return. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Dividends have been really beneficial for Entain shareholders, and that cash payout contributed to why its TSR of 250%, over the last 5 years, is better than the share price return.

A Different Perspective

We're pleased to report that Entain shareholders have received a total shareholder return of 113% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 28% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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 example, we've discovered 3 warning signs for Entain that you should be aware of before investing here.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.