Even the best stock pickers will make plenty of bad investments. And unfortunately for Powerbridge Technologies Co., Ltd. (NASDAQ:PBTS) shareholders, the stock is a lot lower today than it was a year ago. To wit the share price is down 53% in that time. We wouldn't rush to judgement on Powerbridge Technologies because we don't have a long term history to look at. Unfortunately the last month hasn't been any better, with the share price down 56%. Importantly, this could be a market reaction to the recently released financial results. You can check out the latest numbers in our company report.
Powerbridge Technologies isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last twelve months, Powerbridge Technologies increased its revenue by 33%. That's definitely a respectable growth rate. Unfortunately it seems investors wanted more, because the share price is down 53% in that time. It may well be that the business remains approximately on track, but its revenue growth has simply been delayed. For us it's important to consider when you think a company will become profitable, if you're basing your valuation on revenue.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free interactive report on Powerbridge Technologies' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
Given that the market gained 40% in the last year, Powerbridge Technologies shareholders might be miffed that they lost 53%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. With the stock down 27% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. 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. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Powerbridge Technologies (of which 2 are potentially serious!) you should know about.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
This article by Simply Wall St is general in nature. 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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