Gapwaves (STO:GAPW B) adds kr74m to market cap in the past 7 days, though investors from three years ago are still down 61%

Gapwaves AB (publ) (STO:GAPW B) shareholders should be happy to see the share price up 17% in the last month. But that doesn't change the fact that the returns over the last three years have been disappointing. Regrettably, the share price slid 61% in that period. So it's good to see it climbing back up. Perhaps the company has turned over a new leaf.

On a more encouraging note the company has added kr74m to its market cap in just the last 7 days, so let's see if we can determine what's driven the three-year loss for shareholders.

See our latest analysis for Gapwaves

Because Gapwaves made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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.

Over three years, Gapwaves grew revenue at 6.6% per year. Given it's losing money in pursuit of growth, we are not really impressed with that. It's likely this weak growth has contributed to an annualised return of 17% for the last three years. When a stock falls hard like this, some investors like to add the company to a watchlist (in case the business recovers, longer term). After all, growing a business isn't easy, and the process will not always be smooth.

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

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

A Different Perspective

Gapwaves shareholders are up 29% for the year. But that was short of the market average. But at least that's still a gain! Over five years the TSR has been a reduction of 6% per year, over five years. It could well be that the business is stabilizing. 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. To that end, you should be aware of the 3 warning signs we've spotted with Gapwaves .

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 Swedish 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.