ENEFI Energiahatékonysági Nyrt. (BUSE:ENEFI) shareholders have seen the share price descend 16% over the month. But in stark contrast, the returns over the last half decade have impressed. It’s fair to say most would be happy with 209% the gain in that time. We think it’s more important to dwell on the long term returns than the short term returns. The more important question is whether the stock is too cheap or too expensive today.
Given that ENEFI Energiahatékonysági Nyrt 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. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over the last half decade ENEFI Energiahatékonysági Nyrt’s revenue has actually been trending down at about 46% per year. On the other hand, the share price done the opposite, gaining 25%, compound, each year. It’s a good reminder that expectations about the future, not the past history, always impact share prices. Still, this situation makes us a little wary of the stock.
The company’s revenue and earnings (over time) are depicted in the image below.
Take a more thorough look at ENEFI Energiahatékonysági Nyrt’s financial health with this free report on its balance sheet.
A Different Perspective
It’s good to see that ENEFI Energiahatékonysági Nyrt has rewarded shareholders with a total shareholder return of 172% in the last twelve months. That’s better than the annualised return of 25% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
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 HU exchanges.
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