Investors push Gas Plus (BIT:GSP) 12% lower this week, company's increasing losses might be to blame

By
Simply Wall St
Published
March 21, 2022
BIT:GSP
Source: Shutterstock

Gas Plus S.p.A. (BIT:GSP) shareholders might be concerned after seeing the share price drop 12% in the last week. 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 81%.

While this past week has detracted from the company's one-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.

See our latest analysis for Gas Plus

Gas Plus 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Gas Plus actually shrunk its revenue over the last year, with a reduction of 3.8%. Despite the lack of revenue growth, the stock has returned a solid 81% the last twelve months. We can correlate the share price rise with revenue or profit growth, but it seems the market had previously expected weaker results, and sentiment around the stock is improving.

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
BIT:GSP Earnings and Revenue Growth March 21st 2022

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

A Different Perspective

We're pleased to report that Gas Plus shareholders have received a total shareholder return of 81% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 3% 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. 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. For instance, we've identified 3 warning signs for Gas Plus (1 is a bit unpleasant) that you should be aware of.

We will like Gas Plus better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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

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