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Imagine Holding Enthusiast Gaming Holdings (TSE:EGLX) Shares While The Price Zoomed 379% Higher

Enthusiast Gaming Holdings Inc. (TSE:EGLX) shareholders might be concerned after seeing the share price drop 22% in the last month. But over the last year the share price has taken off like one of Elon Musk's rockets. Few could complain about the impressive 379% rise, throughout the period. So it is not that surprising to see the stock retrace a little. While winners often keep winning, it can pay to be cautious after a strong rise.

See our latest analysis for Enthusiast Gaming Holdings

Given that Enthusiast Gaming Holdings 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. 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.

Over the last twelve months, Enthusiast Gaming Holdings' revenue grew by 396%. That's a head and shoulders above most loss-making companies. But the share price seems headed to the moon, up 379% as previously highlighted. Despite the strong growth, it's certainly possible the market has gotten a little over-excited. So this looks like a great watchlist candidate for investors who look for high growth inflexion points.

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The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

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

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. You can see what analysts are predicting for Enthusiast Gaming Holdings in this interactive graph of future profit estimates.

A Different Perspective

Enthusiast Gaming Holdings shareholders should be happy with the total gain of 379% over the last twelve months. The more recent returns haven't been as impressive as the longer term returns, coming in at just 4.8%. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). It's always interesting to track share price performance over the longer term. But to understand Enthusiast Gaming Holdings better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Enthusiast Gaming Holdings (of which 1 is concerning!) you should know about.

Of course Enthusiast Gaming Holdings 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 CA 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.