When you buy a stock there is always a possibility that it could drop 100%. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. For instance, the price of Franklin Covey Co. (NYSE:FC) stock is up an impressive 101% over the last five years. On top of that, the share price is up 16% in about a quarter.
Given that Franklin Covey 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. When a company doesn’t make profits, we’d generally expect to see good revenue growth. 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.
In the last 5 years Franklin Covey saw its revenue grow at 1.3% per year. That’s not a very high growth rate considering the bottom line. In comparison, the share price rise of 15% per year over the last half a decade is pretty impressive. Shareholders should be pretty happy with that, although interested investors might want to examine the financial data more closely to see if the gains are really justified. Some might suggest that the sentiment around the stock is rather positive.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
NYSE:FC Earnings and Revenue Growth May 22nd 2021
If you are thinking of buying or selling Franklin Covey stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Franklin Covey’s TSR for the year was broadly in line with the market average, at 51%. Most would be happy with a gain, and it helps that the year’s return is actually better than the average return over five years, which was 15%. Even if the share price growth slows down from here, there’s a good chance that this is business worth watching in the long term. If you would like to research Franklin Covey in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
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 US 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.
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