SolTech Energy Sweden AB (publ) (STO:SOLT) shareholders might be concerned after seeing the share price drop 30% in the last month. But that doesn’t change the fact that the returns over the last year have been pleasing. After all, the share price is up a market-beating 13% in that time.
See our latest analysis for SolTech Energy Sweden
Given that SolTech Energy Sweden 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. That’s because it’s hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
SolTech Energy Sweden grew its revenue by 502% last year. That’s a head and shoulders above most loss-making companies. While the share price gain of 13% over twelve months is pretty tasty, you might argue it doesn’t fully reflect the strong revenue growth. So quite frankly it could be a good time to investigate SolTech Energy Sweden in some detail. Since we evolved from monkeys, we think in linear terms by nature. So if growth goes exponential, opportunity may exist for the enlightened.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
OM:SOLT Income Statement March 27th 2020
We’re pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It’s always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. So it makes a lot of sense to check out what analysts think SolTech Energy Sweden will earn in the future (free profit forecasts).
What about the Total Shareholder Return (TSR)?
We’d be remiss not to mention the difference between SolTech Energy Sweden’s total shareholder return (TSR) and its share price return. 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. We note that SolTech Energy Sweden’s TSR, at 18% is higher than its share price return of 13%. When you consider it hasn’t been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.
A Different Perspective
Pleasingly, SolTech Energy Sweden’s total shareholder return last year was 18%. That’s better than the annualized TSR of 6.9% over the last three years. The improving returns to shareholders suggests the stock is becoming more popular with time. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example – SolTech Energy Sweden has 6 warning signs (and 2 which are significant) we think you should know about.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on SE 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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