It hasn’t been the best quarter for ESE Entertainment Inc. (CVE:ESE) shareholders, since the share price has fallen 15% in that time. But that cannot eclipse the spectacular share price rise we’ve seen over the last twelve months. Indeed, the share price is up a whopping 549% in that time. Arguably, the recent fall is to be expected after such a strong rise. While winners often keep winning, it can pay to be cautious after a strong rise. We love happy stories like this one. The company should be really proud of that performance!

Since the stock has added CA$20m to its market cap in the past week alone, let’s see if underlying performance has been driving long-term returns.

Check out our latest analysis for ESE Entertainment

ESE Entertainment wasn’t profitable in the last twelve months, it is unlikely we’ll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

ESE Entertainment grew its revenue by 1,728% last year. That’s well above most other pre-profit companies. But the share price seems headed to the moon, up 549% as previously highlighted. Despite the strong growth, it’s certainly possible the market has gotten a little over-excited. But if the share price does moderate a bit, there might be an opportunity for high growth investors.

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

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

ESE Entertainment shareholders should be happy with the total gain of 549% over the last twelve months. Unfortunately the share price is down 15% over the last quarter. Shorter term share price moves often don’t signify much about the business itself. It’s always interesting to track share price performance over the longer term. But to understand ESE Entertainment better, we need to consider many other factors. Like risks, for instance. Every company has them, and we’ve spotted 5 warning signs for ESE Entertainment (of which 1 makes us a bit uncomfortable!) you should know about.

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Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.

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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