If you want to compound wealth in the stock market, you can do so by buying an index fund. But investors can boost returns by picking market-beating companies to own shares in. For example, the PowerSchool Holdings, Inc. (NYSE:PWSC) share price is up 52% in the last 1 year, clearly besting the market decline of around 22% (not including dividends). That’s a solid performance by our standards! We’ll need to follow PowerSchool Holdings for a while to get a better sense of its share price trend, since it hasn’t been listed for particularly long.
With that in mind, it’s worth seeing if the company’s underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
View our latest analysis for PowerSchool Holdings
Because PowerSchool 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. 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 year PowerSchool Holdings saw its revenue grow by 16%. That’s a fairly respectable growth rate. Buyers pushed the share price 52% in response, which isn’t unreasonable. If revenue stays on trend, there may be plenty more share price gains to come. But before deciding this growth stock is underappreciated, you might want to check out profitability trends (and cash flow)
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
PowerSchool Holdings is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for PowerSchool Holdings in this interactive graph of future profit estimates.
A Different Perspective
It’s nice to see that PowerSchool Holdings shareholders have gained 52% over the last year. And the share price momentum remains respectable, with a gain of 32% in the last three months. This suggests the company is continuing to win over new investors. If you would like to research PowerSchool Holdings in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
Of course PowerSchool Holdings may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
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.
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