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If You Had Bought Sequans Communications (NYSE:SQNS) Shares A Year Ago You'd Have Earned 38% Returns

Simply Wall St
·3 min read

Sequans Communications S.A. (NYSE:SQNS) shareholders might be concerned after seeing the share price drop 24% in the last quarter. But looking back over the last year, the returns have actually been rather pleasing! After all, the share price is up a market-beating 38% in that time.

See our latest analysis for Sequans Communications

Sequans Communications wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last twelve months, Sequans Communications' revenue grew by 19%. We respect that sort of growth, no doubt. Buyers pushed the share price 38% in response, which isn't unreasonable. If revenue stays on trend, there may be plenty more share price gains to come. But before deciding this growth stock is underappreciated, you might want to check out profitability trends (and cash flow)

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

earnings-and-revenue-growth
earnings-and-revenue-growth

This free interactive report on Sequans Communications' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Sequans Communications has rewarded shareholders with a total shareholder return of 38% in the last twelve months. Notably the five-year annualised TSR loss of 6% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Sequans Communications you should know about.

We will like Sequans Communications 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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.