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Dubber Corporation Limited (ASX:DUB) shareholders might understandably be very concerned that the share price has dropped 48% in the last quarter. But that doesn't change the fact that the returns over the last five years have been very strong. In fact, the share price is 290% higher today. We think it's more important to dwell on the long term returns than the short term returns. Ultimately business performance will determine whether the stock price continues the positive long term trend.
While this past week has detracted from the company's five-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.
View our latest analysis for Dubber
Dubber isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
For the last half decade, Dubber can boast revenue growth at a rate of 62% per year. Even measured against other revenue-focussed companies, that's a good result. So it's not entirely surprising that the share price reflected this performance by increasing at a rate of 31% per year, in that time. This suggests the market has well and truly recognized the progress the business has made. To our minds that makes Dubber worth investigating - it may have its best days ahead.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
This free interactive report on Dubber's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Investors in Dubber had a tough year, with a total loss of 54%, against a market gain of about 7.7%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 31% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For instance, we've identified 2 warning signs for Dubber that you should be aware of.