The Smart Parking (ASX:SPZ) Share Price Has Gained 104%, So Why Not Pay It Some Attention?
The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But when you pick a company that is really flourishing, you can make more than 100%. Long term Smart Parking Limited (ASX:SPZ) shareholders would be well aware of this, since the stock is up 104% in five years. In the last week the share price is up 4.4%.
Check out our latest analysis for Smart Parking
Because Smart Parking made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last 5 years Smart Parking saw its revenue grow at 4.7% per year. That's not a very high growth rate considering the bottom line. So we wouldn't have expected to see the share price to have lifted 15% for each year during that time, but that's what happened. Shareholders should be pretty happy with that, although interested investors might want to examine the financial data more closely to see if the gains are really justified. It may be that the market is pretty optimistic about Smart Parking.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
Take a more thorough look at Smart Parking's financial health with this free report on its balance sheet.
What about the Total Shareholder Return (TSR)?
We've already covered Smart Parking's share price action, but we should also mention its total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. We note that Smart Parking's TSR, at 112% is higher than its share price return of 104%. 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 good to see that Smart Parking has rewarded shareholders with a total shareholder return of 96% in the last twelve months. That's better than the annualised return of 16% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Smart Parking better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Smart Parking you should know about.
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 AU 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.
