While I-Tech AB (STO:ITECH) shareholders are probably generally happy, the stock hasn’t had particularly good run recently, with the share price falling 14% in the last quarter. In contrast, the return over three years has been impressive. In fact, the share price is up a full 151% compared to three years ago. It’s not uncommon to see a share price retrace a bit, after a big gain. The thing to consider is whether the underlying business is doing well enough to support the current price.
View our latest analysis for I-Tech
I-Tech wasn’t profitable in the last twelve months, 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. 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.
Over the last three years I-Tech has grown its revenue at 32% annually. That’s well above most pre-profit companies. Meanwhile, the share price performance has been pretty solid at 36% 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 I-Tech 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 I-Tech’s balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
I-Tech shareholders are down 38% for the year, but the broader market is up 52%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Fortunately the longer term story is brighter, with total returns averaging about 36% per year over three years. Sometimes when a good quality long term winner has a weak period, it’s turns out to be an opportunity, but you really need to be sure that the quality is there. It’s always interesting to track share price performance over the longer term. But to understand I-Tech better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we’ve spotted 1 warning sign for I-Tech you should know about.
But note: I-Tech may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on SE exchanges.
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This article by Simply Wall St is general in nature. 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.
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