PowerCell Sweden AB (publ) (STO:PCELL) shareholders might be concerned after seeing the share price drop 23% in the last month. But that doesn’t change the fact that the returns over the last half decade have been spectacular. Indeed, the share price is up a whopping 333% in that time. Arguably, the recent fall is to be expected after such a strong rise. Only time will tell if there is still too much optimism currently reflected in the share price. Unfortunately not all shareholders will have held it for the long term, so spare a thought for those caught in the 48% decline over the last twelve months.

Although PowerCell Sweden has shed kr592m from its market cap this week, let’s take a look at its longer term fundamental trends and see if they’ve driven returns.

See our latest analysis for PowerCell Sweden

PowerCell Sweden isn’t currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

For the last half decade, PowerCell Sweden can boast revenue growth at a rate of 34% per year. Even measured against other revenue-focussed companies, that’s a good result. Fortunately, the market has not missed this, and has pushed the share price up by 34% per year in that time. Despite the strong run, top performers like PowerCell Sweden have been known to go on winning for decades. So we’d recommend you take a closer look at this one, but keep in mind the market seems optimistic.

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

This free interactive report on PowerCell Sweden’s balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

We regret to report that PowerCell Sweden shareholders are down 48% for the year. Unfortunately, that’s worse than the broader market decline of 8.5%. Having said that, it’s inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn’t be so upset, since they would have made 34%, each year, over five years. 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. If you would like to research PowerCell Sweden in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.

Of course PowerCell Sweden 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 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.