Stock Analysis

Orion Energy Systems' (NASDAQ:OESX) Wonderful 913% Share Price Increase Shows How Capitalism Can Build Wealth

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NasdaqCM:OESX
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It hasn't been the best quarter for Orion Energy Systems, Inc. (NASDAQ:OESX) shareholders, since the share price has fallen 18% in that time. But over the last three years the stock has shone bright like a diamond. Indeed, the share price is up a whopping 913% in that time. As long term investors the recent fall doesn't detract all that much from the longer term story. Only time will tell if there is still too much optimism currently reflected in the share price.

We love happy stories like this one. The company should be really proud of that performance!

See our latest analysis for Orion Energy Systems

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During three years of share price growth, Orion Energy Systems moved from a loss to profitability. Given the importance of this milestone, it's not overly surprising that the share price has increased strongly.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

earnings-per-share-growth
NasdaqCM:OESX Earnings Per Share Growth February 26th 2021

We know that Orion Energy Systems has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Orion Energy Systems stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's good to see that Orion Energy Systems has rewarded shareholders with a total shareholder return of 82% in the last twelve months. That's better than the annualised return of 45% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Orion Energy Systems , and understanding them should be part of your investment process.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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

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What are the risks and opportunities for Orion Energy Systems?

Orion Energy Systems, Inc. researches, designs, develops, manufactures, markets, sells, installs, and implements energy management systems for commercial office and retail, exterior area lighting, and industrial applications in North America.

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Rewards

  • Earnings are forecast to grow 71.47% per year

Risks

  • Does not have a meaningful market cap ($58M)

  • Shareholders have been diluted in the past year

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Orion Energy Systems

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