Yahoo Finance Investors bid Smartsheet (NYSE:SMAR) up US$246m despite increasing losses YoY, taking three-year CAGR to 4.8%
Low-cost index funds make it easy to achieve average market returns. But in any diversified portfolio of stocks, you'll see some that fall short of the average. Unfortunately for shareholders, while the Smartsheet Inc. (NYSE:SMAR) share price is up 15% in the last three years, that falls short of the market return. Zooming in, the stock is actually down 7.6% in the last year.
On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.
Check out our latest analysis for Smartsheet
Because Smartsheet 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Smartsheet's revenue trended up 35% each year over three years. That's much better than most loss-making companies. The stock is up 5% over that time - a decent but not impressive return. Generally, we'd expect a stronger share price, given the impressive revenue growth. It could be that the stock was previously over-priced, or its losses might worry the market. But you might want to take a closer look at this one.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
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. So it makes a lot of sense to check out what analysts think Smartsheet will earn in the future (free profit forecasts).
A Different Perspective
The last twelve months weren't great for Smartsheet shares, which performed worse than the market, costing holders 7.6%. Meanwhile, the broader market slid about 6.1%, likely weighing on the stock. Investors are up over three years, booking 5% per year, much better than the more recent returns. Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. It's always interesting to track share price performance over the longer term. But to understand Smartsheet better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Smartsheet (of which 1 is significant!) you should know about.
Smartsheet 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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