Even though Sterling and Wilson Renewable Energy (NSE:SWSOLAR) has lost ₹11b market cap in last 7 days, shareholders are still up 90% over 1 year

It hasn't been the best quarter for Sterling and Wilson Renewable Energy Limited (NSE:SWSOLAR) shareholders, since the share price has fallen 20% in that time. But that doesn't change the fact that the returns over the last year have been pleasing. Looking at the full year, the company has easily bested an index fund by gaining 90%.

In light of the stock dropping 8.2% 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 one-year return.

Check out our latest analysis for Sterling and Wilson Renewable Energy

Sterling and Wilson Renewable Energy isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally hope to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

In the last year Sterling and Wilson Renewable Energy saw its revenue grow by 109%. That's a head and shoulders above most loss-making companies. While the share price gain of 90% over twelve months is pretty tasty, you might argue it doesn't fully reflect the strong revenue growth. If that's the case, now might be the time to take a close look at Sterling and Wilson Renewable Energy. Human beings have trouble conceptualizing (and valuing) exponential growth. Is that what we're seeing here?

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

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

A Different Perspective

It's good to see that Sterling and Wilson Renewable Energy has rewarded shareholders with a total shareholder return of 90% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 11% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. Take risks, for example - Sterling and Wilson Renewable Energy has 2 warning signs we think you should be aware of.

Of course Sterling and Wilson Renewable Energy may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.