Vivint Solar, Inc. (NYSE:VSLR) shareholders might be concerned after seeing the share price drop 19% in the last month. In contrast, the return over three years has been impressive. The share price marched upwards over that time, and is now 107% higher than it was. After a run like that some may not be surprised to see prices moderate. The fundamental business performance will ultimately dictate whether the top is in, or if this is a stellar buying opportunity.
Check out our latest analysis for Vivint Solar
Vivint Solar isn't a profitable company, so it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Vivint Solar's revenue trended up 32% each year over three years. That's well above most pre-profit companies. Meanwhile, the share price performance has been pretty solid at 28% compound over three years. This suggests the market has recognized the progress the business has made, at least to a significant degree. Nonetheless, we'd say Vivint Solar is still worth investigating - successful businesses can often keep growing for long periods.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
This free interactive report on Vivint Solar's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
It's nice to see that Vivint Solar shareholders have received a total shareholder return of 26% over the last year. There's no doubt those recent returns are much better than the TSR loss of 14% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.
We will like Vivint Solar better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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