Australia markets closed
  • ALL ORDS

    7,527.80
    +24.30 (+0.32%)
     
  • AUD/USD

    0.6806
    +0.0009 (+0.14%)
     
  • ASX 200

    7,325.60
    +24.10 (+0.33%)
     
  • OIL

    80.97
    +0.99 (+1.24%)
     
  • GOLD

    1,810.80
    +1.20 (+0.07%)
     
  • BTC-AUD

    25,508.80
    +343.28 (+1.36%)
     
  • CMC Crypto 200

    412.08
    +10.66 (+2.65%)
     

The past year for Loop Energy (TSE:LPEN) investors has not been profitable

Loop Energy Inc. (TSE:LPEN) shareholders should be happy to see the share price up 17% in the last month. But that doesn't change the fact that the returns over the last year have been disappointing. Specifically, the stock price slipped by 67% in that time. It's not that amazing to see a bounce after a drop like that. You could argue that the sell-off was too severe.

So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.

View our latest analysis for Loop Energy

Because Loop Energy made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In just one year Loop Energy saw its revenue fall by 3.6%. That's not what investors generally want to see. The share price drop of 67% is understandable given the company doesn't have profits to boast of. Fingers crossed this is the low ebb for the stock. We don't generally like to own companies with falling revenues and no profits, so we're pretty cautious of this one, at the moment.

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

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

Given that the market gained 2.6% in the last year, Loop Energy shareholders might be miffed that they lost 67%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. Putting aside the last twelve months, it's good to see the share price has rebounded by 0.5%, in the last ninety days. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). It's always interesting to track share price performance over the longer term. But to understand Loop Energy better, we need to consider many other factors. For example, we've discovered 3 warning signs for Loop Energy (1 is a bit concerning!) that you should be aware of before investing here.

But note: Loop Energy 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 CA exchanges.

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

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here