Did You Miss Azelio's (STO:AZELIO) Whopping 470% Share Price Gain?

Azelio AB (publ) (STO:AZELIO) shareholders might be concerned after seeing the share price drop 16% in the last month. But that isn't a problem when you consider how the share price has soared over the last year. In that time, shareholders have had the pleasure of a 470% boost to the share price. So we wouldn't blame sellers for taking some profits. Of course, winners often do keep winning, so there may be more gains to come (if the business fundamentals stack up).

See our latest analysis for Azelio

Azelio 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. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last year Azelio saw its revenue shrink by 3.6%. This is in stark contrast to the splendorous stock price, which has rocketed 470% since this time a year ago. There can be no doubt this kind of decoupling of revenue growth and share price growth is unusual to see in loss making companies. To us, a gain like this looks like speculation, but there might be historical trends to back it up.

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

It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

It's nice to see that Azelio shareholders have gained 470% over the last year. The more recent returns haven't been as impressive as the longer term returns, coming in at just 45%. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). 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. Even so, be aware that Azelio is showing 2 warning signs in our investment analysis , 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 SE 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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