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Investing in eEnergy Group (LON:EAAS) a year ago would have delivered you a 110% gain

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While eEnergy Group Plc (LON:EAAS) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 26% in the last quarter. On the other hand, over the last twelve months the stock has delivered rather impressive returns. Like an eagle, the share price soared 110% in that time. So it is important to view the recent reduction in price through that lense. Only time will tell if there is still too much optimism currently reflected in the share price.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

See our latest analysis for eEnergy Group

While eEnergy Group made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

eEnergy Group grew its revenue by 202% last year. That's stonking growth even when compared to other loss-making stocks. And the share price has responded, gaining 110% as we previously mentioned. It's great to see strong revenue growth, but the question is whether it can be sustained. The strong share price rise indicates optimism, so there may be a better opportunity for buyers as the hype fades a bit.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth
earnings-and-revenue-growth

We know that eEnergy Group has improved its bottom line lately, but what does the future have in store? This free report showing analyst forecasts should help you form a view on eEnergy Group

A Different Perspective

It's nice to see that eEnergy Group shareholders have gained 110% over the last year. We regret to report that the share price is down 26% over ninety days. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. It's always interesting to track share price performance over the longer term. But to understand eEnergy Group better, we need to consider many other factors. Case in point: We've spotted 5 warning signs for eEnergy Group you should be aware of, and 1 of them can't be ignored.

Of course eEnergy Group may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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