La Française de l'Energie (EPA:FDE) delivers shareholders impressive 32% CAGR over 5 years, surging 17% in the last week alone

By
Simply Wall St
Published
March 22, 2022
ENXTPA:FDE
Source: Shutterstock

When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But when you pick a company that is really flourishing, you can make more than 100%. One great example is La Française de l'Energie S.A. (EPA:FDE) which saw its share price drive 299% higher over five years. It's also good to see the share price up 63% over the last quarter.

Since the stock has added €35m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

See our latest analysis for La Française de l'Energie

We don't think that La Française de l'Energie's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

In the last 5 years La Française de l'Energie saw its revenue grow at 28% per year. Even measured against other revenue-focussed companies, that's a good result. Meanwhile, its share price performance certainly reflects the strong growth, given the share price grew at 32% per year, compound, during the period. This suggests the market has well and truly recognized the progress the business has made. La Française de l'Energie seems like a high growth stock - so growth investors might want to add it to their watchlist.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

earnings-and-revenue-growth
ENXTPA:FDE Earnings and Revenue Growth March 22nd 2022

We know that La Française de l'Energie has improved its bottom line over the last three years, but what does the future have in store? 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 La Française de l'Energie shareholders have received a total shareholder return of 113% over the last year. That's better than the annualised return of 32% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. For example, we've discovered 1 warning sign for La Française de l'Energie that you should be aware of before investing here.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on FR exchanges.

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