It might be of some concern to shareholders to see the Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) share price down 15% in the last month. Despite this, the stock is a strong performer over the last year, no doubt about that. Indeed, the share price is up an impressive 162% in that time. So we think most shareholders won't be too upset about the recent fall. More important, going forward, is how the business itself is going.
While this past week has detracted from the company's one-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.
Given that Grid Dynamics 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Over the last twelve months, Grid Dynamics Holdings' revenue grew by 55%. That's a head and shoulders above most loss-making companies. Meanwhile, the market has paid attention, sending the share price soaring 162% in response. That sort of revenue growth is bound to attract attention, even if the company doesn't turn a profit. The strong share price rise indicates optimism, so there may be a better opportunity for buyers as the hype fades a bit.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
Take a more thorough look at Grid Dynamics Holdings' financial health with this free report on its balance sheet.
A Different Perspective
Grid Dynamics Holdings shareholders should be happy with the total gain of 162% over the last twelve months. The more recent returns haven't been as impressive as the longer term returns, coming in at just 9.9%. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). 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. For instance, we've identified 3 warning signs for Grid Dynamics Holdings that you should be aware of.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
