The Avalara, Inc. (NYSE:AVLR) share price has had a bad week, falling 13%. But looking back over the last year, the returns have actually been rather pleasing! Looking at the full year, the company has easily bested an index fund by gaining 39%.

See our latest analysis for Avalara

Avalara 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last year Avalara saw its revenue grow by 34%. We respect that sort of growth, no doubt. While the share price performed well, gaining 39% over twelve months, you could argue the revenue growth warranted it. If the company can maintain the revenue growth, the share price could go higher still. But it's crucial to check profitability and cash flow before forming a view on the future.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Avalara is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. If you are thinking of buying or selling Avalara stock, you should check out this free report showing analyst consensus estimates for future profits.

A Different Perspective

Avalara shareholders should be happy with the total gain of 41% over the last twelve months. A substantial portion of that gain has come in the last three months, with the stock up 20% in that time. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. It's always interesting to track share price performance over the longer term. But to understand Avalara better, we need to consider many other factors. Even so, be aware that Avalara is showing 4 warning signs in our investment analysis , you should know about...

If you are like me, then you will 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.

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