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Those who invested in Enthusiast Gaming Holdings (TSE:EGLX) a year ago are up 125%

Enthusiast Gaming Holdings Inc. (TSE:EGLX) shareholders might understandably be very concerned that the share price has dropped 39% in the last quarter. But that doesn't detract from the splendid returns of the last year. Indeed, the share price is up an impressive 125% in that time. So we think most shareholders won't be too upset about the recent fall. Only time will tell if there is still too much optimism currently reflected in the share price.

So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.

Check out our latest analysis for Enthusiast Gaming Holdings

Because Enthusiast Gaming Holdings 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

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In the last year Enthusiast Gaming Holdings saw its revenue grow by 377%. That's a head and shoulders above most loss-making companies. Meanwhile, the market has paid attention, sending the share price soaring 125% in response. It's great to see strong revenue growth, but the question is whether it can be sustained. The strong share price rise indicates optimism, so there may be a better opportunity for buyers as the hype fades a bit.

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

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. So it makes a lot of sense to check out what analysts think Enthusiast Gaming Holdings will earn in the future (free profit forecasts).

A Different Perspective

It's nice to see that Enthusiast Gaming Holdings shareholders have gained 125% over the last year. We regret to report that the share price is down 39% over ninety days. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. 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. To that end, you should be aware of the 3 warning signs we've spotted with Enthusiast Gaming Holdings .

Enthusiast Gaming Holdings 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 CA 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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