Shareholders have faith in loss-making Tigo Energy (NASDAQ:TYGO) as stock climbs 7.7% in past week, taking one-year gain to 12%

Passive investing in index funds can generate returns that roughly match the overall market. But you can significantly boost your returns by picking above-average stocks. To wit, the Tigo Energy, Inc. (NASDAQ:TYGO) share price is 12% higher than it was a year ago, much better than the market return of around 0.4% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! Tigo Energy hasn't been listed for long, so it's still not clear if it is a long term winner.

Since the stock has added US$561m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

View our latest analysis for Tigo Energy

Because Tigo Energy 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.

In the last year Tigo Energy saw its revenue grow by 40%. That's a fairly respectable growth rate. Buyers pushed the share price 12% in response, which isn't unreasonable. If the company can maintain the revenue growth, the share price could go higher still. But it's crucial to check profitability and cash flow before forming a view on the future.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

Tigo Energy shareholders should be happy with the total gain of 12% over the last twelve months. And the share price momentum remains respectable, with a gain of 7.6% in the last three months. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Tigo Energy (of which 1 is significant!) you should know about.

Of course Tigo Energy may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.