Stock Analysis

Shareholders in Eos Energy Enterprises (NASDAQ:EOSE) have lost 78%, as stock drops 28% this past week

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NasdaqCM:EOSE
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It is doubtless a positive to see that the Eos Energy Enterprises, Inc. (NASDAQ:EOSE) share price has gained some 43% in the last three months. But only the myopic could ignore the astounding decline over three years. To wit, the share price sky-dived 78% in that time. So we're relieved for long term holders to see a bit of uplift. The thing to think about is whether the business has really turned around.

After losing 28% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

See our latest analysis for Eos Energy Enterprises

Given that Eos Energy Enterprises didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Over three years, Eos Energy Enterprises grew revenue at 114% per year. That's well above most other pre-profit companies. So why has the share priced crashed 21% per year, in the same time? The share price makes us wonder if there is an issue with profitability. Sometimes fast revenue growth doesn't lead to profits. If the company is low on cash, it may have to raise capital soon.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth
NasdaqCM:EOSE Earnings and Revenue Growth July 31st 2023

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free report showing analyst forecasts should help you form a view on Eos Energy Enterprises

A Different Perspective

Over the last year, Eos Energy Enterprises shareholders took a loss of 26%. In contrast the market gained about 12%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. However, the loss over the last year isn't as bad as the 21% per annum loss investors have suffered over the last three years. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 5 warning signs for Eos Energy Enterprises (4 are significant) that you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

Valuation is complex, but we're helping make it simple.

Find out whether Eos Energy Enterprises is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.