The one-year returns have been incredible for Solar Alliance Energy (CVE:SOLR) shareholders despite underlying losses increasing

By
Simply Wall St
Published
August 10, 2021
TSXV:SOLR
Source: Shutterstock

While Solar Alliance Energy Inc. (CVE:SOLR) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 12% in the last quarter. But that cannot eclipse the spectacular share price rise we've seen over the last twelve months. In that time, shareholders have had the pleasure of a 767% boost to the share price. So the recent fall isn't enough to negate the good performance. Only time will tell if there is still too much optimism currently reflected in the share price. Anyone who held for that rewarding ride would probably be keen to talk about it.

The past week has proven to be lucrative for Solar Alliance Energy investors, so let's see if fundamentals drove the company's one-year performance.

See our latest analysis for Solar Alliance Energy

Given that Solar Alliance Energy 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last year Solar Alliance Energy saw its revenue grow by 32%. That's a fairly respectable growth rate. Arguably it's more than reflected in the truly wondrous share price gain of 767% in the last year. We're always cautious when the share price is up so much, but there's certainly enough revenue growth to justify taking a closer look at Solar Alliance Energy.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
TSXV:SOLR Earnings and Revenue Growth August 11th 2021

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

It's good to see that Solar Alliance Energy has rewarded shareholders with a total shareholder return of 767% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 30% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 5 warning signs with Solar Alliance Energy (at least 1 which is a bit concerning) , and understanding them should be part of your investment process.

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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