Solstad Offshore (OB:SOFF) delivers shareholders fantastic 86% CAGR over 3 years, surging 11% in the last week alone

It hasn't been the best quarter for Solstad Offshore ASA (OB:SOFF) shareholders, since the share price has fallen 11% in that time. But over the last three years the stock has shone bright like a diamond. Indeed, the share price is up a whopping 543% in that time. So the recent fall doesn't do much to dampen our respect for the business. The share price action could signify that the business itself is dramatically improved, in that time. It really delights us to see such great share price performance for investors.

Since it's been a strong week for Solstad Offshore shareholders, let's have a look at trend of the longer term fundamentals.

See our latest analysis for Solstad Offshore

Given that Solstad Offshore didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. 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.

Solstad Offshore's revenue trended up 7.5% each year over three years. Considering the company is losing money, we think that rate of revenue growth is uninspiring. Therefore, we're a little surprised to see the share price gain has been so strong, at 86% 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.

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

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 Solstad Offshore shareholders have received a total shareholder return of 18% over the last year. Notably the five-year annualised TSR loss of 14% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. 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. Take risks, for example - Solstad Offshore has 1 warning sign we think you should be aware of.

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 Norwegian 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.