Did Business Growth Power Saudi Industrial Export's (TADAWUL:4140) Share Price Gain of 108%?

When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right stock, you can make a lot more than 100%. For example, the Saudi Industrial Export Company (TADAWUL:4140) share price had more than doubled in just one year - up 108%. It's down 4.2% in the last seven days. Unfortunately the longer term returns are not so good, with the stock falling 54% in the last three years.

View our latest analysis for Saudi Industrial Export

Saudi Industrial Export 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 expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Saudi Industrial Export actually shrunk its revenue over the last year, with a reduction of 3.9%. So we would not have expected the share price to rise 108%. It just goes to show the market doesn't always pay attention to the reported numbers. Of course, it could be that the market expected this revenue drop.

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

Take a more thorough look at Saudi Industrial Export's financial health with this free report on its balance sheet.

A Different Perspective

We're pleased to report that Saudi Industrial Export shareholders have received a total shareholder return of 108% over one year. That's better than the annualised return of 3% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Saudi Industrial Export you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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

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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. 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.
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