Can You Imagine How Jubilant Gapwaves' (STO:GAPW B) Shareholders Feel About Its 130% Share Price Gain?

Gapwaves AB (publ) (STO:GAPW B) shareholders have seen the share price descend 12% over the month. But that doesn't change the fact that the returns over the last year have been very strong. Indeed, the share price is up an impressive 130% in that time. So some might not be surprised to see the price retrace some. More important, going forward, is how the business itself is going.

See our latest analysis for Gapwaves

Gapwaves 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Gapwaves grew its revenue by 65% last year. That's well above most other pre-profit companies. And the share price has responded, gaining 130% as we previously mentioned. It's great to see strong revenue growth, but the question is whether it can be sustained. Given the positive sentiment around the stock we're cautious, but there's no doubt its worth watching.

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

Take a more thorough look at Gapwaves' financial health with this free report on its balance sheet.

A Different Perspective

We're pleased to report that Gapwaves rewarded shareholders with a total shareholder return of 130% over the last year. That's better than the annualized TSR of 8% over the last three years. Given the track record of solid returns over varying time frames, it might be worth putting Gapwaves on your watchlist. It's always interesting to track share price performance over the longer term. But to understand Gapwaves better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Gapwaves , and understanding them should be part of your investment process.

But note: Gapwaves 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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