enCore Energy Corp. (CVE:EU) shareholders might be concerned after seeing the share price drop 11% in the last week. But that doesn’t change the fact that the returns over the last half decade have been spectacular. To be precise, the stock price is 979% higher than it was five years ago, a wonderful performance by any measure. Arguably, the recent fall is to be expected after such a strong rise. The most important thing for savvy investors to consider is whether the underlying business can justify the share price gain. While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 15% drop, in the last year. We love happy stories like this one. The company should be really proud of that performance!
Since the long term performance has been good but there’s been a recent pullback of 11%, let’s check if the fundamentals match the share price.
Check out our latest analysis for enCore Energy
Because enCore Energy 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 desire strong revenue growth. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last 5 years enCore Energy saw its revenue grow at 100% per year. Even measured against other revenue-focussed companies, that’s a good result. Arguably, this is well and truly reflected in the strong share price gain of 61%(per year) over the same period. It’s never too late to start following a top notch stock like enCore Energy, since some long term winners go on winning for decades. On the face of it, this looks lke a good opportunity, although we note sentiment seems very positive already.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
This free interactive report on enCore Energy’s balance sheet strength is a great place to start, if you want to investigate the stock further.
enCore Energy shareholders are down 15% for the year, but the market itself is up 24%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 61% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It’s always interesting to track share price performance over the longer term. But to understand enCore Energy better, we need to consider many other factors. For example, we’ve discovered 2 warning signs for enCore Energy that you should be aware of before investing here.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Canadian 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.
This article was originally published here.
