If You Had Bought I-Tech (STO:ITECH) Shares A Year Ago You'd Have Earned 13% Returns

I-Tech AB (STO:ITECH) shareholders might be concerned after seeing the share price drop 15% in the last quarter. Looking on the brighter side, the stock is actually up over twelve months. But to be blunt its return of 13% fall short of what you could have got from an index fund (around 19%).

Check out our latest analysis for I-Tech

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

I-Tech went from making a loss to reporting a profit, in the last year.

When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action.

We think that the revenue growth of 34% could have some investors interested. We do see some companies suppress earnings in order to accelerate revenue growth.

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

We know that I-Tech has improved its bottom line lately, but what does the future have in store? This free report showing analyst forecasts should help you form a view on I-Tech

A Different Perspective

I-Tech shareholders have gained 13% for the year. The bad news is that's no better than the average market return, which was roughly 19%. The stock trailed the market by 22% in that time, testament to the power of passive investing. It might be that investors are more concerned about the business lately due to some fundamental change (or else the share price simply got ahead of itself, previously). It's always interesting to track share price performance over the longer term. But to understand I-Tech better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for I-Tech you should be aware of.

But note: I-Tech may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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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