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Can You Imagine How Elated TPI Composites' (NASDAQ:TPIC) Shareholders Feel About Its 304% Share Price Gain?

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Simply Wall St
·3 min read
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For us, stock picking is in large part the hunt for the truly magnificent stocks. You won't get it right every time, but when you do, the returns can be truly splendid. Take, for example, the TPI Composites, Inc. (NASDAQ:TPIC) share price, which skyrocketed 304% over three years. It's also good to see the share price up 97% over the last quarter.

See our latest analysis for TPI Composites

TPI Composites 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 it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Over the last three years TPI Composites has grown its revenue at 21% annually. That's much better than most loss-making companies. In light of this attractive revenue growth, it seems somewhat appropriate that the share price has been rocketing, boasting a gain of 59% per year, over the same period. It's always tempting to take profits after a share price gain like that, but high-growth companies like TPI Composites can sometimes sustain strong growth for many years. So we'd recommend you take a closer look at this one, or even put it on your watchlist.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

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

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

We're pleased to report that TPI Composites rewarded shareholders with a total shareholder return of 220% over the last year. So this year's TSR was actually better than the three-year TSR (annualized) of 59%. Given the track record of solid returns over varying time frames, it might be worth putting TPI Composites on your watchlist. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should learn about the 2 warning signs we've spotted with TPI Composites (including 1 which is concerning) .

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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 (at) simplywallst.com.