Passively investing in an index fund is a great way to ensure that your own returns roughly match the overall market. However, if you buy individual stocks, you can do either better or worse. Unfortunately that Iconovo AB (publ) (STO: ICO) share price fell 24% within twelve months. That is well below the market return of 18%. Iconovo has not been listed for long. While we are wary of recent poorly performing listings, it can still hold its own over time. On the other hand, the share price is up 9.9% in the past week.
Check out our latest analysis for Iconovo
Iconovo has not been profitable for the past twelve months. It is unlikely that there is a strong correlation between the share price and earnings per share (EPS). Revenue is arguably our next best option. In general, when a company is not making profits, we expect good sales growth. This is because rapid sales growth can easily be extrapolated to profit projections, which are often of considerable size.
Iconovo’s sales have not grown at all over the past year. In fact, it fell 32%. Investors generally don’t want to see that. The share price has been slowing lately, down 24% in a year. That seems pretty reasonable given the lack of profit and sales growth. We believe most owners should expect sales growth to improve or costs to decrease.
Below you can see how revenue and earnings have changed over time (find out the exact values by clicking on the picture).
OM: ICO earnings and sales growth February 7, 2021
This free An interactive report on Iconovo’s balance sheet is a great place to start if you want to research the stock further.
While Iconovo shareholders fell 24% over the year, the market itself rose 18%. Be aware, however, that even the best stocks can sometimes underperform the market over a twelve month period. It’s great to see a nice little 3.4% recovery over the past three months. This might just be a jump because the selling was too aggressive but keep your fingers crossed, it’s the start of a new trend. I find it very interesting to look at the share price as a proxy for business development over the long term. But to really gain insight, we need to consider other information as well. For example we identified 2 warning signs for Iconovo you should be aware of that.
But note: Iconovo may not be the best stock to buy. So take a look at it free List of interesting companies with a history of earnings growth (and further growth forecast).
Please note that the market returns given in this article reflect the market weighted average returns on stocks currently traded on SE exchanges.
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This article from Simply Wall St is of a general nature. It is not a recommendation to buy or sell shares and does not take into account your goals or your financial situation. We want to provide you with a long-term, focused analysis based on fundamental data. Note that our analysis may not take into account the latest price sensitive company announcements or quality materials. Simply Wall St has no position in the stocks mentioned.
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