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Awardit AB (publ) (STO:AWRD) shareholders should be happy to see the share price up 27% in the last month. But that doesn't change the fact that the returns over the last year have been less than pleasing. After all, the share price is down 12% in the last year, significantly under-performing the market.
See our latest analysis for Awardit
We don't think that Awardit's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.
Awardit grew its revenue by 115% over the last year. That's well above most other pre-profit companies. Given the revenue growth, the share price drop of 12% seems quite harsh. Our sympathies to shareholders who are now underwater. On the bright side, if this company is moving profits in the right direction, top-line growth like that could be an opportunity. Our brains have evolved to think in linear fashion, so there's value in learning to recognize exponential growth. We are, in some ways, simply the wisest of the monkeys.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. It might be well worthwhile taking a look at our free report on Awardit's earnings, revenue and cash flow.
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Awardit the TSR over the last year was -8.9%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
A Different Perspective
Awardit shareholders are down 8.9% for the year (even including dividends) , even worse than the market loss of 4.5%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. It's worth noting that the last three months did the real damage, with a 39% decline. So it seems like some holders have been dumping the stock of late - and that's not bullish. 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. Case in point: We've spotted 6 warning signs for Awardit you should be aware of.