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The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you pick the right stock, you can make a lot more than 100%. For example, the Polar Power, Inc. (NASDAQ:POLA) share price has soared 245% in the last year. Most would be very happy with that, especially in just one year! On top of that, the share price is up 169% in about a quarter. And shareholders have also done well over the long term, with an increase of 78% in the last three years.
Given that Polar Power didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. 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.
Polar Power actually shrunk its revenue over the last year, with a reduction of 77%. We're a little surprised to see the share price pop 245% in the last year. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. It's quite likely the revenue fall was already priced in, anyway.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized 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. If you are thinking of buying or selling Polar Power stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
It's nice to see that Polar Power shareholders have gained 245% (in total) over the last year. That gain actually surpasses the 21% TSR it generated (per year) over three years. Given the track record of solid returns over varying time frames, it might be worth putting Polar Power on your watchlist. It's always interesting to track share price performance over the longer term. But to understand Polar Power better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Polar Power you should be aware of, and 2 of them make us uncomfortable.
If you are like me, then you will not want to miss this free list of growing companies that insiders are 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.
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