Investing can be hard but the potential fo an individual stock to pay off big time inspires us. But when you hold the right stock for the right time period, the rewards can be truly huge. One such superstar is TAS Tecnologia Avanzata dei Sistemi S.p.A. (BIT:TAS), which saw its share price soar 452% in three years. Meanwhile the share price is 2.0% higher than it was a week ago.
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Because TAS Tecnologia Avanzata dei Sistemi is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong 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.
Over the last three years TAS Tecnologia Avanzata dei Sistemi has grown its revenue at 7.4% annually. That’s not a very high growth rate considering it doesn’t make profits. Therefore, we’re a little surprised to see the share price gain has been so strong, at 77% per year, compound, over three years. A win is a win, even if the revenue growth doesn’t really explain it, in our view). Shareholders would want to be sure that the share price rise is sustainable.
The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.
If you are thinking of buying or selling TAS Tecnologia Avanzata dei Sistemi stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
While the broader market lost about 5.1% in the twelve months, TAS Tecnologia Avanzata dei Sistemi shareholders did even worse, losing 17%. Having said that, it’s inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn’t be so upset, since they would have made 41%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
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 IT exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.