Investing in DeepVerge (LON:DVRG) three years ago would have delivered you a 408% gain

For us, stock picking is in large part the hunt for the truly magnificent stocks. Not every pick can be a winner, but when you pick the right stock, you can win big. One such superstar is DeepVerge plc (LON:DVRG), which saw its share price soar 408% in three years. In more good news, the share price has risen 12% in thirty days.

So let's assess the underlying fundamentals over the last 3 years and see if they've moved in lock-step with shareholder returns.

See our latest analysis for DeepVerge

Because DeepVerge made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

DeepVerge's revenue trended up 101% each year over three years. That's well above most pre-profit companies. And it's not just the revenue that is taking off. The share price is up 72% per year in that time. Despite the strong run, top performers like DeepVerge have been known to go on winning for decades. In fact, it might be time to put it on your watchlist, if you're not already familiar with the stock.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth

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. Dive deeper into the earnings by checking this interactive graph of DeepVerge's earnings, revenue and cash flow.

A Different Perspective

Over the last year DeepVerge shareholders have received a TSR of 14%. It's always nice to make money but this return falls short of the market return which was about 27% for the year. At least the longer term returns (running at about 72% a year, are better. Even the best companies don't see strong share price performance every year. 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. Even so, be aware that DeepVerge is showing 4 warning signs in our investment analysis , and 3 of those are potentially serious...

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. 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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