Gevo (NASDAQ:GEVO) shareholders are up 132% this past week, but still in the red over the last three years

Gevo, Inc. (NASDAQ:GEVO) shareholders will doubtless be very grateful to see the share price up 181% in the last quarter. But that is meagre solace in the face of the shocking decline over three years. To wit, the share price sky-dived 74% in that time. So it sure is nice to see a bit of an improvement. Only time will tell if the company can sustain the turnaround.

The recent uptick of 132% could be a positive sign of things to come, so let's take a look at historical fundamentals.

View our latest analysis for Gevo

Given that Gevo 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 hope to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

Over three years, Gevo grew revenue at 103% per year. That is faster than most pre-profit companies. So on the face of it we're really surprised to see the share price down 20% a year in the same time period. The share price makes us wonder if there is an issue with profitability. Sometimes fast revenue growth doesn't lead to profits. Unless the balance sheet is strong, the company might have to raise capital.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

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

A Different Perspective

Gevo shareholders are up 22% for the year. But that return falls short of the market. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 9% endured over half a decade. So this might be a sign the business has turned its fortunes around. 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 example, we've discovered 2 warning signs for Gevo that you should be aware of before investing here.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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