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Investors bid Swan Energy (NSE:SWANENERGY) up ₹5.4b despite increasing losses YoY, taking three-year CAGR to 26%

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Swan Energy Limited (NSE:SWANENERGY) shareholders might be concerned after seeing the share price drop 19% in the last quarter. But that doesn’t change the fact that the returns over the last three years have been respectable. After all, the stock has performed better than the market (86%) over that time, over which it gained 99%.

Since it’s been a strong week for Swan Energy shareholders, let’s have a look at trend of the longer term fundamentals.

Though if you’re not interested in researching what drove SWANENERGY’s performance, we have a free list of interesting investing ideas to potentially inspire your next investment!

Swan Energy isn’t currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn’t make profits, we’d generally expect to see good revenue growth. That’s because it’s hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last 3 years Swan Energy saw its revenue grow at 18% per year. That’s pretty nice growth. While the share price has done well, compounding at 26% yearly, over three years, that move doesn’t seem over the top. Of course, valuation is quite sensitive to the rate of growth. Keep in mind that the strength of the balance sheet impacts the options open to the company.

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

earnings-and-revenue-growth
NSEI:SWANENERGY Earnings and Revenue Growth September 3rd 2022

We’re pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It’s always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

A Different Perspective

We’re pleased to report that Swan Energy shareholders have received a total shareholder return of 68% over one year. Of course, that includes the dividend. That’s better than the annualised return of 9% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Swan Energy is showing 3 warning signs in our investment analysis , and 2 of those are significant…

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IN exchanges.

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.

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