DroneShield (ASX:DRO) shareholder returns have been enviable, earning 874% in 5 years
For many, the main point of investing in the stock market is to achieve spectacular returns. While not every stock performs well, when investors win, they can win big. Just think about the savvy investors who held DroneShield Limited (ASX:DRO) shares for the last five years, while they gained 874%. If that doesn't get you thinking about long term investing, we don't know what will. On top of that, the share price is up 71% in about a quarter. We love happy stories like this one. The company should be really proud of that performance!
The past week has proven to be lucrative for DroneShield investors, so let's see if fundamentals drove the company's five-year performance.
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Given that DroneShield 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. Shareholders of unprofitable companies usually desire strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last 5 years DroneShield saw its revenue grow at 56% per year. That's well above most pre-profit companies. Fortunately, the market has not missed this, and has pushed the share price up by 58% per year in that time. It's never too late to start following a top notch stock like DroneShield, since some long term winners go on winning for decades. On the face of it, this looks lke a good opportunity, although we note sentiment seems very positive already.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
If you are thinking of buying or selling DroneShield stock, you should check out this FREE detailed report on its balance sheet.
It's good to see that DroneShield has rewarded shareholders with a total shareholder return of 17% in the last twelve months. Having said that, the five-year TSR of 58% a year, is even better. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. It's always interesting to track share price performance over the longer term. But to understand DroneShield better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for DroneShield you should be aware of.
If you are like me, then you will not want to miss this free list of undervalued small caps 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 Australian exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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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