Recent 12% pullback isn't enough to hurt long-term Vestum (STO:VESTUM) shareholders, they're still up 321% over 3 years

Vestum AB (publ) (STO:VESTUM) shareholders might be concerned after seeing the share price drop 28% in the last quarter. But over the last three years the stock has shone bright like a diamond. Indeed, the share price is up a whopping 321% in that time. So you might argue that the recent reduction in the share price is unremarkable in light of the longer term performance. The only way to form a view of whether the current price is justified is to consider the merits of the business itself.

Since the long term performance has been good but there's been a recent pullback of 12%, let's check if the fundamentals match the share price.

View our latest analysis for Vestum

While Vestum made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

Over the last three years Vestum has grown its revenue at 132% annually. That's much better than most loss-making companies. And it's not just the revenue that is taking off. The share price is up 61% per year in that time. Despite the strong run, top performers like Vestum have been known to go on winning for decades. So we'd recommend you take a closer look at this one, or even put it on your watchlist.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

We know that Vestum has improved its bottom line over the last three years, but what does the future have in store? You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

It's good to see that Vestum has rewarded shareholders with a total shareholder return of 277% in the last twelve months. Notably the five-year annualised TSR loss of 8% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Vestum better, we need to consider many other factors. For instance, we've identified 3 warning signs for Vestum (1 is potentially serious) that you should be aware of.

We will like Vestum 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 SE 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.