Does Exela Technologies (NASDAQ: XELA) 81% share price increase match its trading performance?

If you want to accumulate wealth in the stock market, you can do so by purchasing an index fund. But if you choose the right individual stocks, you could earn more than that. Namely, the Exela Technologies, Inc. The stock price (NASDAQ: XELA) is 81% higher than a year ago, much better than the market return of around 33% (excluding dividends) over the same period. It’s a solid performance by our standards! When you zoom out, the stock is actually down 80% in the last three years.

Discover our latest analysis for Exela Technologies

Since Exela Technologies has not made a profit in the past twelve months, we will focus on revenue growth to get a quick view of its business development. Generally speaking, companies with no profits are expected to increase their income every year, and at a good rate. As you can imagine, rapid revenue growth, when sustained, often leads to rapid profit growth.

Last year, Exela Technologies saw its turnover decline by 19%. Despite the lack of earnings growth, the stock has returned a solid 81% over the past twelve months. We can correlate the rise in the stock price with the growth in income or earnings, but it seems that the market was previously expecting weaker results, and sentiment around the stock is improving.

The graph below illustrates the evolution of earnings and income over time (reveal the exact values ​​by clicking on the image).

NasdaqCM: XELA Profits and Revenue Growth August 6, 2021

You can see how his track record has strengthened (or weakened) over time in this free interactive graphic.

A different perspective

Fortunately, the total return to shareholders of Exela Technologies last year was 81%. This recent result is much better than the 22% drop suffered by shareholders each year (on average) over the last three. We’re generally cautious of over-weighing near-term data, but the recent improvement is definitely positive. I find it very interesting to look at the long-term share price as an indicator of company performance. But to really get an overview, we have to take other information into account as well. Consider, for example, the ever-present specter of investment risk. We have identified 4 warning signs with Exela Technologies (at least 2 of which are of concern), and understanding them should be part of your investment process.

Sure Exela Technologies may not be the best stock to buy. So you might want to see this free collection of growth stocks.

Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on the US stock exchanges.

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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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