If You Had Bought STEP Energy Services (TSE:STEP) Stock A Year Ago, You Could Pocket A 260% Gain Today

By
Simply Wall St
Published
June 12, 2021
TSX:STEP
Source: Shutterstock

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. For example, the STEP Energy Services Ltd. (TSE:STEP) share price has soared 260% return in just a single year. It's also up 22% in about a month. Zooming out, the stock is actually down 84% in the last three years.

Check out our latest analysis for STEP Energy Services

Given that STEP Energy Services 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.

In the last year STEP Energy Services saw its revenue shrink by 55%. We're a little surprised to see the share price pop 260% in the last year. It just goes to show the market doesn't always pay attention to the reported numbers. It's quite likely the revenue fall was already priced in, anyway.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth
TSX:STEP Earnings and Revenue Growth June 13th 2021

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

It's nice to see that STEP Energy Services shareholders have gained 260% (in total) over the last year. That certainly beats the loss of about 23% per year over three years. The optimist would say this is evidence that the stock has bottomed, and better days lie ahead. 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. Even so, be aware that STEP Energy Services is showing 1 warning sign in our investment analysis , you should know about...

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 CA exchanges.

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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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