The simplest way to invest in stocks is to buy exchange traded funds. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the Iconovo AB (publ) (STO:ICO) share price is up 44% in the last year, clearly besting the market return of around 9.1% (not including dividends). If it can keep that out-performance up over the long term, investors will do very well! We’ll need to follow Iconovo for a while to get a better sense of its share price trend, since it hasn’t been listed for particularly long.
Because Iconovo is loss-making, 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. 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.
Iconovo actually shrunk its revenue over the last year, with a reduction of 5.8%. The stock is up 44% in that time, a fine performance given the revenue drop. To us that means that there isn’t a lot of correlation between the past revenue performance and the share price, but a closer look at analyst forecasts and the bottom line may well explain a lot.
The company’s revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
If you are thinking of buying or selling Iconovo stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Iconovo shareholders should be happy with the total gain of 44% over the last twelve months. That’s better than the more recent three month gain of 7.1%, implying that share price has plateaued recently. Having said that, we doubt shareholders would be concerned. It seems the market is simply waiting on more information, because if the business delivers so will the share price (eventually). If you would like to research Iconovo in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
But note: Iconovo 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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