How Much Did Sunworks'(NASDAQ:SUNW) Shareholders Earn From Share Price Movements Over The Last Five Years?
Sunworks, Inc. (NASDAQ:SUNW) shareholders will doubtless be very grateful to see the share price up 290% in the last month. But will that heal all the wounds inflicted over 5 years of declines? Unlikely. In fact, the share price has tumbled down a mountain to land 84% lower after that period. So we don’t gain too much confidence from the recent recovery. The important question is if the business itself justifies a higher share price in the long term.
We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don’t have to lose the lesson.
View our latest analysis for Sunworks
Because Sunworks 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 it’s hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Over five years, Sunworks grew its revenue at 1.2% per year. That’s not a very high growth rate considering it doesn’t make profits. Nonetheless, it’s fair to say the rapidly declining share price (down 13%, compound, over five years) suggests the market is very disappointed with this level of growth. While we’re definitely wary of the stock, after that kind of performance, it could be an over-reaction. We’d recommend focussing any further research on the likelihood of profitability in the foreseeable future, given the muted revenue growth.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
This free interactive report on Sunworks’ balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Sunworks provided a TSR of 12% over the last twelve months. But that return falls short of the market. On the bright side, that’s still a gain, and it is certainly better than the yearly loss of about 13% endured over half a decade. It could well be that the business is stabilizing. It’s always interesting to track share price performance over the longer term. But to understand Sunworks better, we need to consider many other factors. To that end, you should learn about the 5 warning signs we’ve spotted with Sunworks (including 1 which is is concerning) .
We will like Sunworks better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, 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.
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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