It hasn’t been the best quarter for PCAS SA (EPA:PCA) shareholders, since the share price has fallen 28% in that time. But in stark contrast, the returns over the last half decade have impressed. In fact, the share price is 138% higher today. To some, the recent pullback wouldn’t be surprising after such a fast rise. Of course, that doesn’t necessarily mean it’s cheap now.
View our latest analysis for PCAS
Given that PCAS didn’t make a profit in the last twelve months, we’ll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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, PCAS can boast revenue growth at a rate of 4.5% per year. That’s not a very high growth rate considering the bottom line. So we wouldn’t have expected to see the share price to have lifted 19% for each year during that time, but that’s what happened. Shareholders should be pretty happy with that, although interested investors might want to examine the financial data more closely to see if the gains are really justified. It may be that the market is pretty optimistic about PCAS.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
ENXTPA:PCA Income Statement April 23rd 2020
Take a more thorough look at PCAS’s financial health with this free report on its balance sheet.
What about the Total Shareholder Return (TSR)?
Investors should note that there’s a difference between PCAS’s total shareholder return (TSR) and its share price change, which we’ve covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. PCAS’s TSR of 145% for the 5 years exceeded its share price return, because it has paid dividends.
A Different Perspective
We regret to report that PCAS shareholders are down 31% for the year. Unfortunately, that’s worse than the broader market decline of 17%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there’s a good opportunity. On the bright side, long term shareholders have made money, with a gain of 20% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It’s always interesting to track share price performance over the longer term. But to understand PCAS better, we need to consider many other factors. For example, we’ve discovered 3 warning signs for PCAS (1 makes us a bit uncomfortable!) that you should be aware of before investing here.
Of course PCAS may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on FR exchanges.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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