Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) shareholders should be happy to see the share price up 25% in the last month. But that doesn't change the reality of under-performance over the last twelve months. The cold reality is that the stock has dropped 46% in one year, under-performing the market.

The recent uptick of 6.8% could be a positive sign of things to come, so let's take a look at historical fundamentals.

See our latest analysis for Grid Dynamics Holdings

Because Grid Dynamics 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last twelve months, Grid Dynamics Holdings increased its revenue by 70%. That's well above most other pre-profit companies. The share price drop of 46% over twelve months would be considered disappointing by many, so you might argue the company is getting little credit for its impressive revenue growth. On the bright side, if this company is moving profits in the right direction, top-line growth like that could be an opportunity. Our monkey brains haven't evolved to think exponentially, so humans do tend to underestimate companies that have exponential growth.

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

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. You can see what analysts are predicting for Grid Dynamics Holdings in this interactive graph of future profit estimates.

A Different Perspective

Grid Dynamics Holdings shareholders are down 46% for the year, even worse than the market loss of 8.1%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. It's great to see a nice little 21% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). 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. Take risks, for example - Grid Dynamics Holdings has 2 warning signs we think you should be aware of.

Grid Dynamics Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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.