When you buy a stock there is always a possibility that it could drop 100%. But on the bright side, you can make far more than 100% on a really good stock. One great example is SunPower Corporation (NASDAQ:SPWR) which saw its share price drive 248% higher over five years. It's also good to see the share price up 45% over the last quarter.
Although SunPower has shed US$232m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.
However if you'd rather see where the opportunities and risks are within SPWR's industry, you can check out our analysis on the US Electrical industry.
Because SunPower 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over the last half decade SunPower's revenue has actually been trending down at about 12% per year. On the other hand, the share price done the opposite, gaining 28%, compound, each year. It just goes to show tht the market is forward looking, and it's not always easy to predict the future based on past trends. Still, this situation makes us a little wary of the stock.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
SunPower is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. So it makes a lot of sense to check out what analysts think SunPower will earn in the future (free analyst consensus estimates)
We'd be remiss not to mention the difference between SunPower's total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. SunPower hasn't been paying dividends, but its TSR of 431% exceeds its share price return of 248%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.
It's nice to see that SunPower shareholders have received a total shareholder return of 12% over the last year. However, the TSR over five years, coming in at 40% per year, is even more impressive. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. It's always interesting to track share price performance over the longer term. But to understand SunPower better, we need to consider many other factors. For instance, we've identified 1 warning sign for SunPower that you should be aware of.
We will like SunPower better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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.
Find out whether SunPower is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis. Find out more about our editorial guidelines and team.
SunPower Corporation, a solar technology and energy services provider, offers solar, storage, and home energy solutions to customers primarily in the United States and Canada.
The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.
Read more about these checks in the individual report sections or in our analysis model.
High growth potential with adequate balance sheet.
Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis. Find out more about our editorial guidelines and team.
SunPower Corporation, a solar technology and energy services provider, offers solar, storage, and home energy solutions to customers primarily in the United States and Canada.
The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.
Read more about these checks in the individual report sections or in our analysis model.
High growth potential with adequate balance sheet.
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