Stock Analysis

Swelling losses haven't held back gains for SRT Marine Systems (LON:SRT) shareholders since they're up 59% over 5 years

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It hasn't been the best quarter for SRT Marine Systems plc (LON:SRT) shareholders, since the share price has fallen 22% in that time. But that doesn't change the fact that the returns over the last five years have been pleasing. Its return of 59% has certainly bested the market return!

In light of the stock dropping 12% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive five-year return.

View our latest analysis for SRT Marine Systems

SRT Marine Systems wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last 5 years SRT Marine Systems saw its revenue grow at 5.5% per year. Put simply, that growth rate fails to impress. While it's hard to say just how much value the company added over five years, the annualised share price gain of 10% seems about right. The business could be one worth watching but we generally prefer faster revenue growth.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

AIM:SRT Earnings and Revenue Growth March 14th 2023

Take a more thorough look at SRT Marine Systems' financial health with this free report on its balance sheet.

A Different Perspective

It's good to see that SRT Marine Systems has rewarded shareholders with a total shareholder return of 3.5% in the last twelve months. However, that falls short of the 10% TSR per annum it has made for shareholders, each year, over five years. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. 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. To that end, you should learn about the 4 warning signs we've spotted with SRT Marine Systems (including 1 which is a bit unpleasant) .

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 GB exchanges.

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