U.S. Markets closed

Is Qt Group Oyj's (HEL:QTCOM) 257% Share Price Increase Well Justified?

Simply Wall St

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But in contrast you can make much more than 100% if the company does well. For example, the Qt Group Oyj (HEL:QTCOM) share price has soared 257% in the last three years. That sort of return is as solid as granite. Also pleasing for shareholders was the 31% gain in the last three months.

View our latest analysis for Qt Group Oyj

Given that Qt Group Oyj 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last 3 years Qt Group Oyj saw its revenue grow at 18% per year. That's a very respectable growth rate. It's fair to say that the market has acknowledged the growth by pushing the share price up 53% per year. It's hard to value pre-profit businesses, but it seems like the market has become a lot more optimistic about this one! Some investors like to buy in just after a company becomes profitable, since that can be a powerful inflexion point.

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

HLSE:QTCOM Income Statement, December 4th 2019

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Qt Group Oyj's total shareholder return (TSR) and its share price return. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. We note that Qt Group Oyj's TSR, at 269% is higher than its share price return of 257%. When you consider it hasn't been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.

A Different Perspective

It's nice to see that Qt Group Oyj shareholders have gained 117% (in total) over the last year. That's better than the annualized TSR of 54% over the last three years. The improving returns to shareholders suggests the stock is becoming more popular with time. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on FI exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.