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Did You Miss Prospa Group's (ASX:PGL) 31% Share Price Gain?

A diverse portfolio of stocks will always have winners and losers. But the goal is to pick stocks that do better than average. Prospa Group Limited (ASX:PGL) has done well over the last year, with the stock price up 31% beating the market return of 26% (not including dividends). Prospa Group hasn't been listed for long, so it's still not clear if it is a long term winner.

View our latest analysis for Prospa Group

Because Prospa Group 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Prospa Group actually shrunk its revenue over the last year, with a reduction of 41%. The stock is up 31% in that time, a fine performance given the revenue drop. We can correlate the share price rise with revenue or profit growth, but it seems the market had previously expected weaker results, and sentiment around the stock is improving.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
earnings-and-revenue-growth

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. So it makes a lot of sense to check out what analysts think Prospa Group will earn in the future (free profit forecasts).

A Different Perspective

Prospa Group shareholders have gained 31% over twelve months, which isn't far from the market return of 30%. A substantial portion of that gain has come in the last three months, with the stock up 44% in that time. It could be that word is spreading about its positive business attributes. It's always interesting to track share price performance over the longer term. But to understand Prospa Group better, we need to consider many other factors. For instance, we've identified 1 warning sign for Prospa Group that you should be aware of.

Prospa Group is not the only stock that insiders are buying. 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 (at) simplywallst.com.

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