Update: Whole Earth Brands (NASDAQ:FREE) Stock Gained 71% In The Last Year

Simply Wall St
·2 min read

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 Whole Earth Brands, Inc. (NASDAQ:FREE) share price is up 71% in the last year, clearly besting the market return of around 33% (not including dividends). If it can keep that out-performance up over the long term, investors will do very well! Whole Earth Brands hasn't been listed for long, so it's still not clear if it is a long term winner.

Check out our latest analysis for Whole Earth Brands

Because Whole Earth Brands 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last year Whole Earth Brands saw its revenue grow by 111%. That's well above most other pre-profit companies. While the share price gain of 71% over twelve months is pretty tasty, you might argue it doesn't fully reflect the strong revenue growth. If that's the case, now might be the time to take a close look at Whole Earth Brands. Human beings have trouble conceptualizing (and valuing) exponential growth. Is that what we're seeing here?

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

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. This free report showing analyst forecasts should help you form a view on Whole Earth Brands

A Different Perspective

Whole Earth Brands shareholders should be happy with the total gain of 71% over the last twelve months. We regret to report that the share price is down 6.6% over ninety days. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. 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. Even so, be aware that Whole Earth Brands is showing 1 warning sign in our investment analysis , you should know about...

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies 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 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.

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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