This week we saw the Pylon S.A. (WSE:PYL) share price climb by 13%. But that can't change the reality that over the longer term (five years), the returns have been really quite dismal. The share price has failed to impress anyone , down a sizable 68% during that time. So we're not so sure if the recent bounce should be celebrated. Of course, this could be the start of a turnaround.
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Check out our latest analysis for Pylon
Given that Pylon only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.
Over five years, Pylon grew its revenue at 23% per year. That's better than most loss-making companies. Unfortunately for shareholders the share price has dropped 20% per year - disappointing considering the growth. It's safe to say investor expectations are more grounded now. If you think the company can keep up its revenue growth, you'd have to consider the possibility that there's an opportunity here.
The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.
Take a more thorough look at Pylon's financial health with this free report on its balance sheet.
What about the Total Shareholder Return (TSR)?
We've already covered Pylon's share price action, but we should also mention its total shareholder return (TSR). 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. Pylon hasn't been paying dividends, but its TSR of -63% exceeds its share price return of -68%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.
A Different Perspective
While the broader market lost about 5.8% in the twelve months, Pylon shareholders did even worse, losing 10.0%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. However, the loss over the last year isn't as bad as the 18% per annum loss investors have suffered over the last half decade. We'd need to see some sustained improvements in the key metrics before we could muster much enthusiasm. Before deciding if you like the current share price, check how Pylon scores on these 3 valuation metrics.