The last three months have been tough on HIVE Digital Technologies Ltd. (CVE:HIVE) shareholders, who have seen the share price decline a rather worrying 43%. But that doesn't undermine the rather lovely longer-term return, if you measure over the last three years. In fact, the share price is up a full 126% compared to three years ago. 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.
So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.
HIVE Digital Technologies 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. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
HIVE Digital Technologies' revenue trended up 33% each year over three years. That's well above most pre-profit companies. Along the way, the share price gained 31% per year, a solid pop by our standards. But it does seem like the market is paying attention to strong revenue growth. That's not to say we think the share price is too high. In fact, it might be worth keeping an eye on this one.
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 HIVE Digital Technologies' balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Investors in HIVE Digital Technologies had a tough year, with a total loss of 29%, against a market gain of about 0.3%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 4%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand HIVE Digital Technologies better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with HIVE Digital Technologies (including 1 which makes us a bit uncomfortable) .
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 Canadian exchanges.
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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.