Yahoo Finance The past year for A2Z Smart Technologies (CVE:AZ) investors has not been profitable
A2Z Smart Technologies Corp. (CVE:AZ) shareholders will doubtless be very grateful to see the share price up 64% in the last quarter. But that is meagre solace when you consider how the price has plummeted over the last year. During that time the share price has plummeted like a stone, down 71%. Arguably, the recent bounce is to be expected after such a bad drop. The bigger issue is whether the company can sustain the momentum in the long term.
It's worthwhile assessing if the company's economics have been moving in lockstep with these underwhelming shareholder returns, or if there is some disparity between the two. So let's do just that.
View our latest analysis for A2Z Smart Technologies
Given that A2Z Smart Technologies didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. 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.
In the last twelve months, A2Z Smart Technologies increased its revenue by 144%. That's well above most other pre-profit companies. So on the face of it we're really surprised to see the share price down 71% over twelve months. There's clearly something unusual going on here such as an acquisition that hasn't delivered expected profits. We'd recommend taking a very close look at the stock (and any available forecasts), before considering a purchase, because the share price is not correlated with the revenue growth, that's for sure. Of course, investors do over-react when they are stressed out, so the sell-off could be unjustifiably severe.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. If you are thinking of buying or selling A2Z Smart Technologies stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
Over the last year, A2Z Smart Technologies shareholders took a loss of 71%. In contrast the market gained about 0.3%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. The three-year loss of 1.5% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that A2Z Smart Technologies is showing 5 warning signs in our investment analysis , and 1 of those is a bit unpleasant...
A2Z Smart Technologies is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA 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.
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