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Pieridae Energy Limited (TSE:PEA) shareholders might be rather concerned because the share price has dropped 46% in the last month. On the other hand, over the last twelve months the stock has delivered rather impressive returns. Indeed, the share price is up an impressive 201% in that time. So it is important to view the recent reduction in price through that lense. Investors should be wondering whether the business itself has the fundamental value required to continue to drive gains.
Since the long term performance has been good but there's been a recent pullback of 11%, let's check if the fundamentals match the share price.
See our latest analysis for Pieridae Energy
Because Pieridae 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. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last year Pieridae Energy saw its revenue grow by 29%. That's a fairly respectable growth rate. The revenue growth is decent but the share price had an even better year, gaining 201%. If the profitability is on the horizon then now could be a very exciting time to be a shareholder. But investors need to be wary of how the 'fear of missing out' could influence them to buy without doing thorough research.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. You can see what analysts are predicting for Pieridae Energy in this interactive graph of future profit estimates.
A Different Perspective
We're pleased to report that Pieridae Energy rewarded shareholders with a total shareholder return of 201% over the last year. That gain actually surpasses the 4% TSR it generated (per year) over three years. The improving returns to shareholders suggests the stock is becoming more popular with time. It's always interesting to track share price performance over the longer term. But to understand Pieridae Energy better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Pieridae Energy (at least 2 which make us uncomfortable) , and understanding them should be part of your investment process.