SolTech Energy Sweden AB (publ) (STO:SOLT) shareholders should be happy to see the share price up 12% in the last week. But that is small recompense for the exasperating returns over three years. In that time, the share price dropped 59%. 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 kr120m 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 SolTech Energy Sweden

Given that SolTech Energy Sweden 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. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over three years, SolTech Energy Sweden grew revenue at 67% per year. That is faster than most pre-profit companies. In contrast, the share price is down 17% compound, over three years – disappointing by most standards. This could mean hype has come out of the stock because the losses are concerning investors. But a share price drop of that magnitude could well signal that the market is overly negative on the stock.

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

It’s probably worth noting we’ve seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. It might be well worthwhile taking a look at our free report on SolTech Energy Sweden’s earnings, revenue and cash flow.

What About The Total Shareholder Return (TSR)?

Investors should note that there’s a difference between SolTech Energy Sweden’s total shareholder return (TSR) and its share price change, which we’ve covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. SolTech Energy Sweden hasn’t been paying dividends, but its TSR of -55% exceeds its share price return of -59%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.

A Different Perspective

While the broader market lost about 1.9% in the twelve months, SolTech Energy Sweden shareholders did even worse, losing 25%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there’s a good opportunity. On the bright side, long term shareholders have made money, with a gain of 8% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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 3 warning signs for SolTech Energy Sweden (2 are potentially serious) that you should be aware of.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

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.