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Mach7 Technologies' (ASX:M7T) Wonderful 553% Share Price Increase Shows How Capitalism Can Build Wealth

Simply Wall St
·3-min read

Investing can be hard but the potential fo an individual stock to pay off big time inspires us. You won't get it right every time, but when you do, the returns can be truly splendid. Take, for example, the Mach7 Technologies Limited (ASX:M7T) share price, which skyrocketed 553% over three years. And in the last week the share price has popped 24%.

It really delights us to see such great share price performance for investors.

See our latest analysis for Mach7 Technologies

Given that Mach7 Technologies only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

Over the last three years Mach7 Technologies has grown its revenue at 24% annually. That's much better than most loss-making companies. And it's not just the revenue that is taking off. The share price is up 87% per year in that time. It's always tempting to take profits after a share price gain like that, but high-growth companies like Mach7 Technologies can sometimes sustain strong growth for many years. 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
earnings-and-revenue-growth

We know that Mach7 Technologies has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Mach7 Technologies' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Pleasingly, Mach7 Technologies' total shareholder return last year was 68%. The TSR has been even better over three years, coming in at 87% per 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Mach7 Technologies , and understanding them should be part of your investment process.

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.

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