Investors one-year losses grow to 53% as the stock sheds €37m this past week

By
Simply Wall St
Published
May 10, 2022
BME:SOL
Source: Shutterstock

Taking the occasional loss comes part and parcel with investing on the stock market. And unfortunately for Soltec Power Holdings, S.A. (BME:SOL) shareholders, the stock is a lot lower today than it was a year ago. To wit the share price is down 53% in that time. Soltec Power Holdings hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. More recently, the share price has dropped a further 28% in a month.

If the past week is anything to go by, investor sentiment for Soltec Power Holdings isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

View our latest analysis for Soltec Power Holdings

Given that Soltec Power Holdings 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Soltec Power Holdings grew its revenue by 75% over the last year. That's well above most other pre-profit companies. In contrast the share price is down 53% over twelve months. Yes, the market can be a fickle mistress. This could mean hype has come out of the stock because the bottom line is concerning investors. Generally speaking investors would consider a stock like this less risky once it turns a profit. But when do you think that will happen?

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
BME:SOL Earnings and Revenue Growth May 10th 2022

This free interactive report on Soltec Power Holdings' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

We doubt Soltec Power Holdings shareholders are happy with the loss of 53% over twelve months. That falls short of the market, which lost 8.6%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 26% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Soltec Power Holdings is showing 2 warning signs 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 ES exchanges.

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